Tuesday, October 12, 2010

TEXAS: Lower Taxes, Lower Government Spending, and Less Regulation



For those who point at Texas with a disapproving eye, it looks like Texas has the leg up on California in numerous ways.  From Jan Norman at the Orange County Register:

Texas’ competitive advantage over California, according to the study, is lower taxes, lower government spending and less regulation.



The study compared the two states on six broad categories:
  • taxes on labor
  • taxes on capital
  • taxes on consumption
  • overall tax environment
  • regulatory environment
  • government spending policies
The Texas Public Policy Foundation is a free enterprise and personal responsibility research institute. One of the study’s authors is former Californian Arthur Laffer, a supply side economist who advised President Ronald Reagan. “A comparison between Texas and California is not only valid but vital for our country,” Laffer said. “Both are large, strategically located states with strong demographics and bountiful natural resources. But California’s regulatory and tax costs, coupled with budgetary and policy instability, render it an impotent competitor when standing next to low-tax, business-friendly Texas, which levies no capital gains or income taxes to support its affordable government.”
 
Laffer is perhaps best known for advocating that lower taxes can actually increase revenues to government by encouraging economic growth.

“It’s just striking how the states with no income tax (including Texas) outperform the states with high income taxes (California’s highest personal income tax rate, 10.55% is third highest in the nation),” Laffer said.
Sally C. Pipes, president and CEO of San Francisco-based Pacific Research Institute, said, “If Californians still have trouble understanding why so many of our former neighbors have gone to Texas, this scorecard spells it out in painful detail.”

California does outperform Texas on a few measures:
  • State and local property tax burden per capita: California $32.89, Texas $36.50
  • Sales tax per $1,000 of personal income: California $25.62, Texas $29.47
But on most measures that the study uses, Texas comes out ahead:
  • State sales tax rate: Texas 6.25%, California 8.25%
  • Marginal corporate income tax rate: Texas 1% GRT, California 8.84%
  • Total state and local government expenditures per capita: Texas $7,763.49, California $11,256.83
  • Average annual growth in government spending: Texas 7.02%, California 7.29%
  • Recession-related job loss from peak employment to July 2010: Texas, -2.3%, California, -8.7%
“The lighter regulatory burden in Texas also helps its economy flourish in comparison to California, which overloads businesses in the state with excessive costs and burdens,” the 2010 study says.
 
 
 

3 comments:

  1. Thank you for highlighting the report! The full report can be downloaded at http://www.texaspolicy.com/pdf/2010-10-CompetitiveStatesTXvsCA.pdf.

    ReplyDelete
  2. As California goes, so goes the rest of the country. If we are to compare California to dirty Texas, and I'm calling them dirty because they are due to their lax environmental laws, we might also compare California to other places that are doing better.

    Consider the EU and countries like Germany.
    I saw this from Thom Hartmann today. He is on your local radio at AM 1150 from 9 am to Noon.

    Alternet has an article today up "Why Germany Has It So Good -- and Why America Is Going Down the Drain" by Terrence McNally. While the headlines about strikes, terrorism, and Islamophobia in Europe are making the the news in the US, we hearing nada about how the European Union - 27 member nations with around half a billion people, a third larger than the US - has become the biggest, wealthiest trading bloc in the world, producing nearly a third of the world's economy -- outdoing the US and China combined. Europe is now home to more Fortune 500 companies than either the US, China or Japan. The European Union spend much less than America for universal healthcare rated by the World Health Organization as the best in the world, while the U.S. health care system is ranked at a measly 37th and 40 million Americans have no access to health care other than the ER. Europe leads in tackling global climate change and is twice as energy efficient as the US, creating hundreds of thousands of new jobs in the process. Their ecological "footprint" (the amount of the earth's capacity that a population consumes) is around half that of the United States for a similar standard of living. Americans work much longer hours than Europeans - "on average we work the equivalent of nine extra 40-hour weeks per year." According to Thomas Geoghegan who wrote the book, "Were You Born on the Wrong Continent?," "Germany has created a high-wage, unionized economy without shipping all its jobs abroad or creating a massive trade deficit, or any trade deficit at all. And even as the Germans outsell the United States, they manage to take six weeks of vacation every year. They're beating us with one hand tied behind their back." He added, "Since 2003, it's not China but Germany, that colossus of European socialism, that has either led the world in export sales or at least been tied for first."


    Greg, do we want this country to follow the lead of Texas or the EU? It all depends on the kind of life style that one seeks. I would rather see the whole lifted up rather than a few rich people and the rest with guns and pickup trucks working for the Chinese that just bought their oil fields.

    Europeans make things, we need to get back to making things.
    If we make things like Germany does, people will buy them and they will pay us for doing it.

    Or we can continue to make war with the rest of the world and outsource what's left.

    ReplyDelete
  3. "As California goes, so goes the rest of the country." I disagree. Some state are much worse off and other, much better. The chart above shows California lagging behind in all categories (unless you are a tax and spend socialist, in which case California is doing quite well).

    Look at Table 1, Page 12 of the report at http://www.texaspolicy.com/pdf/2010-10-CompetitiveStatesTXvsCA.pdf.

    Germany has a 42% income tax rate on income of $100,000US or $71,143EU and a municipal trade tax of 14%-17% that is imposed by the municipality. Their unemployment, though slightly better than California, is nothing to be proud of at 10.8%.

    Germany's high-wage unionized economy is just another bubble ready to burst. You cannot have everyone in a union. If everyone was in a union, there would be ZERO competition and never a need to strike. The employees would make greater and greater demands to quench their thirst for MORE until the house of cards collapses.

    I completely agree that the US needs to return to manufacturing. However, we cannot compete with 3rd-world countries, like China, which are allowed to pollute to their heart's content. Until Obama or the next guy/gal gets the courage to place tariffs on imports, we will never catch up.

    I'm not saying Texas is perfect but they certainly are doing better than the Left coast.

    ReplyDelete

Greg Sebourn

Orange County Bail Bonds

The Beauty of a Storm

The Beauty of a Storm
Orange County, Ca.

My Grandma - A Eulogy

LET'S TALK ABOUT 1914 FOR A MOMENT.



FOR STARTERS, GRANDMA WAS BORN TUESDAY, DECEMBER 22, 1914 IN HER FAMILY'S ATWOOD RANCH HOUSE.



IT IS WORTH NOTING THOSE ALSO BORN IN 1914:

JACK LALANNE

JOE DIMAGGIO

DANNY THOMAS



AND WHO DIED IN 1914:

JOHN MUIR, THE FAMOUS NATURALIST FOR WHICH NUMEROUS ROADS, PARKS, HOTELS, AND NATURE RESERVES ARE NAMED.



IT IS ALSO WORTH NOTING THAT IN 1914 WOODROW WILSON SIGNS MOTHER'S DAY PROCLAMATION AND BABE RUTH MAKES HIS MAJOR LEAGUE DEBUT WITH THE RED SOX. MOTHER'S DAY AND BASEBALL- TWO OF MY FAVORITES!! (PERHAPS HER NICKNAME "BABE" CAME FROM BABE RUTH???)



GRANDMA WAS BORN INTO A PERIOD OF TIME FILLED WITH TURMOIL. IN JUNE OF 1914 ARCHDUKE FRANZS FERDINAND WAS ASSASSINATED. WITHIN ONE MONTH WORLD WAR I RAGED ACROSS EUROPE. TWO DAYS AFTER HER BIRTH HOWEVER, GERMAN AND BRITISH TROOPS INTERRUPTED WWI TO CELEBRATE CHRISTMAS. (PERHAPS THEY PAUSE KNOWING THAT A GREAT WOMAN WAS BORNE) WORLD WAR I CONTINUED UNTIL THE TREATY OF VERSAILLES IN 1919.



ALTHOUGH SHE WAS ONLY 5 YEARS OLD, SHE SAW THE LEAGUE OF NATIONS CREATED AND THE 19TH AMENDMENT WAS APPROVED BY THE U.S. CONGRESS GUARANTEEING THE RIGHTS OF WOMEN TO VOTE.



SHE LIVED THROUGH MANY NOTABLE EVENTS. LIKE THE 1933 LONG BEACH EARTHQUAKE OR WHEN ATWOOD FLOODED ALONG WITH MOST OF ORANGE COUNTY IN 1938 AND THE FLOOD-WATERS CLAIMED MORE THAN 50 PEOPLE, 43 OF WHICH WERE FROM ATWOOD! ALL OF THIS DURING A TIME THAT WE READ ABOUT IN SCHOOL AND KNOWN AS "THE GREAT DEPRESSION". SOMEWHERE IN ALL OF THAT SHE FOUND THE LOVE OF HER LIFE, GRANDPA LEO, GRADUATED HIGH SCHOOL, GOT MARRIED, AND HAD KIDS!



THEN THERE WAS WORLD WAR II. FROM PEARL HARBOR TO HIROSHIMA, GRANDMA WAS RAISING MY UNCLE BOB AND MOM ARLINE. WITH AIR-RAID SIRENS AND BLACKOUTS SHE WAS A WIFE AND MOTHER. WHAT A TIME TO RAISE CHILDREN! I BET GRANDMA'S PARENTS WERE ABEL TO TELL HER A THING OR TWO ABOUT RAISING KIDS IN WARTIME.



GRANDMA WAS THERE WHEN THE BOY SCOUTS OF AMERICA HELD THEIR 3RD ANNUAL NATIONAL JAMBOREE IN 1953. SHE SAW AIRBASES OPEN IN '42 AND CLOSE IN '99. SHE WATCHED WALTER KNOTT START UP HIS BERRY FARM AND WALT DISNEY TURN ORANGE GROVES AND STRAWBERRY PATCHES INTO DISNEYLAND!



SHE SAW THE HORSE AND CARRIAGE FADE AWAY INTO HISTORY AND SPACE TRAVEL EXPLODE BEFORE HER WITH THE FIRST LUNAR LANDING. JUST IMAGINE HOW MUCH TECHNOLOGY HAS CHANGED OVER THE LAST 100 YEARS. FROM TUBE RECTIFIERS TO SUPERCONDUCTORS; FROM TRANS-ATLANTIC TELEGRAPH CABLES TO SATELLITE TV.



SHE SAW MORE IN HER 93 YEARS THAN MOST OF US WILL EVER READ ABOUT, LET ALONE LIVE THROUGH!



OF THOSE 93 YEARS IT IS MY HONOR TO HAVE BEEN HER GRANDSON FOR 35 OF THEM. SHE WAS MY MOTHER WHEN MOM HAD TO WORK. SHE WIPED MY NOSE AND PUT FOOD IN MY MOUTH. SHE LET ME PLAY WITH GRANDPA EVEN THOUGH SHE NEEDED HIM TO TAKE HER TO THE STORE. SHE WAS MY GRANDMA AND I WILL MISS HER IMMENSELY.



JUST LOOK AROUND THIS ROOM; SHE DID THIS. SHE IS RESPONSIBLE FOR BRINGING SO MANY GOOD PEOPLE INTO THIS WORLD AND TOGETHER TODAY. THIS IS HER LEGACY.



A Dedication To My Loving Wife, Stacey. Thank you for all you do for me!

Brad Paisley - I Thought I Loved You Then


I remember trying not to stare the night that I first met you
You had me mesmerized
3 weeks later in the front porch light taking 45 min to kiss you goodnight
I hadn’t told you yet but I thought I loved you then

Chorus
Now you’re my whole life now you’re my whole world
I just can’t believe the way I feel about you girl
Like a river meets the sea
Stronger than it’s ever been
We’ve come so far since that day
And I thought I loved you then.

I remember taking you back to right where I first met you
You were so surprised
There were people around
But I didn’t care I got down on one knee right there
And once again I thought I loved you then

Chorus
Now you’re my whole life now you’re my whole world
I just can’t believe the way I feel about you girl
Like a river meets the sea
Stronger than it’s ever been
We’ve come so far since that day
And I thought I loved you then.

I can just see you with a baby on the way
I can just see you when your hair is turning gray
What I can’t see is how I’m ever gonna love you more
But I’ve said that before.

Now you’re my whole life now you’re my whole world
I just can’t believe the way I feel about you girl
Well look back some day at this moment that we’re in
And I'll look at you and say I thought I loved you then
And I thought I loved you then...

Download AutoCAD's Educational Version