California Governor Browns has been trading quips with Governor Rick Perry of Texas over the best economic model. Brown preferring the California model, while Perry prefers the Texas model. Brown finds the California vs Texas comparison “tiresome”. The real question is which model do the facts support, California or Texas.
Reason Magazine has some insight:
There’s a reason Brown and company find the comparison “tiresome.” That is, more people seem to prefer the Texas model over the California model. That’s despite the real advantages that California historically has held as a refuge for people looking for open minds and social elbow room. Stephen Levy, director of the Center for the Continuing Study of the California Economy, insists, “If you look at the areas that are the most tolerant — the Bay area and Hollywood — you find the highest clusters of creativity and innovation.” That’s long been true, but it’s probably not enough in an era when Texas and California aren’t as far apart on the tolerance issue as they were in the past . . .
And, in fact, the Post points to Census Bureau figures showing that, last year, “63,000 people moved from California to Texas, while 43,000 in Texas moved to California.”
Just as important, money moved, too. Travis H. Brown, author of How Money Walks, points to IRS figures that track the flow of wealth from some states and to others. From 1992 -2010, California was a net loser of $45.27 billion in adjusted gross income. $6.02 billion of that went to Texas. Texas, on the other hand, gained $24.94 billion in AGI during those years, with California the top source for transfers.
California continues to raise the cost of doing business in California with the implementation of AB-32, the Global Warming Solutions Act, which so far has produced a $1 billion dollar slush fund for CO2 reduction. All this in the face of growing evidence there was no significant connection between CO2 reduction and global warming. Texas business on the other hand are not burdened by AB-32 and the companion implementation laws and regulations.
Proposition 30 raised taxes on the richest California, yet another incentive for the movement of money out of the state. When you look at the map below, you can see that states with lower taxes are attracting people and money form the higher taxing states. California is a major source of those transfers, and Texas a major recipient. I think the facts support Governor Perry’s economic model. The sad part is that the Texas model will continue to improve, while the political nitwits in Sacramento continue to burden business and wealthy people with more regulations and taxes.
More on the money transfers HERE.