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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.

 

 

 

SB 375 (Steinberg) - More From SCAG

 

 

 

"SB 375 (Steinberg) is California state law that became effective January 1, 2009. This new law requires California's Air Resources Board (CARB) to develop regional reduction targets for greenhouse gas emissions (GHG), and prompts the creation of regional plans to reduce emissions from vehicle use throughout the state. California's 18 Metropolitan Planning Organizations (MPOs) have been tasked with creating "Sustainable Community Strategies" (SCS). The MPOs are required to develop the SCS through integrated land use and transportation planning and demonstrate an ability to attain the proposed reduction targets by 2020 and 2035."

If it doesn't bring tears to your eyes, it will certainly make a dent in your wallet!

Vote YES ON 23 and fire your city council representatives who sit on SCAG's Regional Council Districts this November 2nd.