Noted conservative and Wall Street Journal editorialist John Fund has an excellent column out in today’s National Review Online speaking to the longstanding economic rivalry between Texas and California, the very one that the Lone Star State now has the upper hand in.
As evidence, Fund points to some on-the-ground observations:
Joseph Vranich, a California business-relocation expert, agrees that California has a systemic job-creation problem and says it needs to worry about more than just Texas. He says that 15 states are sending delegations to California and seeking to convince firms to relocate or, if they stay in California, to expand their operations out of state. Wealthy individuals such as golfer Phil Mickelson are openly talking about following Tiger Woods and moving to low-tax states such as Florida. EBay, Facebook, and Visa, among others, have recently made major expansions in Texas. “That kind of talk will only intensify now that top earners in California face a 13.3 percent income-tax hit on earnings over $1 million,” says Jon Fleischman, editor of the political blog FlashReport.com. “That’s not only the highest rate in the U.S. It’s the highest rate any state has had since World War II.” [emphasis mine]
The nanny state in California, with its high taxes and onerous regulatory environment, has so poisoned its business climate that, according to Vranich, almost a third of all states, including Texas, are sensing the opportunity to poach the Golden State’s businesses. The fact that California cannot return the favor by sending its own delegations to “steal” businesses from these suitor states should tell you a lot about its future prospects, as well as our own.