Low-tax Texas beats Big-government California

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Despite similarities in their histories and demographic makeup, Texas and California differ greatly in terms of their respective approaches to public policy. With its low taxes and “hands-off” economic policies, Texas’ economy is booming and the state is experiencing a population inflow. Meanwhile, California’s recent experience has been quite the opposite, thanks to its expensive and increasingly incompetent government, says Michael Barone, a resident fellow at the American Enterprise Institute (AEI).

California has gone in for big government in a big way, says Barone:

  • Democrats hold big margins in the legislature largely because affluent voters in Los Angeles and the San Francisco Bay Area favour their liberal positions on cultural issues.
  • Those Democratic majorities have obediently done the bidding of public employee unions to the point that state government faces huge budget deficits.
  • Gov. Arnold Schwarzenegger’s attempt to reduce the power of the Democratic-union combine with referenda was defeated in 2005 when public employee unions poured $100 million – all originally extracted from taxpayers – into effective TV ads.

    Texas differs vividly from California, says Barone:

  • Texas has low taxes – and no state income taxes – and a much smaller government.
  • Its legislature meets for only 90 days every two years, compared with California’s year-round legislature.
  • Its fiscal condition is sound and public employee unions are weak or non-existent.

    In the meantime, Texas’ economy has been booming. Unemployment rates have been below the national average for more than a decade, as companies small and large generate new jobs, says Barone.

    And Americans have been voting for Texas with their feet, says Barone:

  • From 2000 to 2009, some 848,000 people moved from other parts of the United States to Texas, about the same number as moved in from abroad.
  • That inflow continued in 2008-09, when 143,000 Americans moved into Texas, more than double the number in any other state; at the same time 98,000 were moving out of California.
  • Texas is on the way to gain four additional House seats and electoral votes in the 2010 reapportionment.

    Source: Michael Barone, Low-Tax Texas Beats Big-Government California, Washington Examiner, March 7, 2010.

    For text: http://www.washingtonexaminer.com/politics/Low-tax-Texas-beats-big-government-California-86681467.html

    For more on Government Issues: http://www.ncpa.org/sub/dpd/index.php?Article_Category=33

    First published by the National Center for Policy Analysis, Dallas and Washington, USA

    FMF Policy Bulletin/ 16 March 2010

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