In 2008, the Foundation wanted to know which state-Texas or California-had more of a competitive advantage as a result of its economic policies. The winner was to be decided according to six different metrics: taxes on labor income; taxes on capital income; taxes on consumption; overall tax environment; government spending policies; and government regulatory policies.

As we noted in our original study, “Competitive States: Texas vs. California“, the results overwhelmingly favored Texas.

Now, two years later, the Foundation is once again asking which state has put itself in the best position to prosper-Texas or California. And, once again, Texas is the clear winner.

An excerpt from the “Competitive States 2010” study:

“Texas’ most significant competitive advantage over California is that Texas has no income tax where California has a steeply progressive income tax. Texas’ appropriate level of government spending relative to the income of Texans is another competitive advantage that keeps its economy strong. Finally, the lighter regulatory burden in Texas also helps its economy flourish in comparison to California.”

“Unlike the complicated policy prescriptions coming out of Sacramento and Washington D.C., Texas has proven that keeping the tax, spending, and regulatory burdens low-and staying away from the personal income tax-is a simple remedy to the economic malaise afflicting our nation.”

– Talmadge Heflin