http://www.latimes.com/news/opinion/la-oe-voegli1-2009nov01,0,825554.story
It certainly explains why Janet and I left California.
Let me know what you think.
Hags
Subscribe to:
Post Comments (Atom)
A vigorous political blog, not for the fainthearted.
3 comments:
Hags:
Good article, though the conclusions are overly broad. California remains an extremely attractive place to live, though it is expensive. Taxes are but one of the prices that Californians pay. Many - particularly affluent retirees - decide their money will go much further elsewhere.
The "high tax state" numbers assume that taxes are the only issue. They are not. In fact, they are low on the list. As a former Rust Belt resident, I can tell you the weather sucks in most of the "high tax states". There is a dearth of opportunity. As our society has become more transient, these regions do not stand a chance. The best and brightest leave because they can. Particularly among the young. Fear of change is no anchor.
IMO, a few cities such as NY, Chicago, Boston and DC will continue to thrive. Otherwise, all the action is going on in places that offer superior vistas and climes. Its as simple as that.
What is the lesson on taxes? At the state level, "high tax states" need to dramatically change their way of doing business. Taxes need to go down and services need to improve. As Hags mentioned earlier, the 20 and out retirement concept has got to go. Even with diligent budget management the Rust Belt states suffer from a legacy cost disadvantage. They have substantial pension obligations that the Sun Belt states simply don't have. It is a vicious cycle that needs to be arrested. Good luck to whomever tries to hoe that long road.
The fact is though and you are missing the point that the high tax states are unfriendly to business. People cannot relocate from State to state if there are no jobs. Climate is by far the smallest piece of someones decision. many people from the north and midwest cannot stand the summers in the desert. Some people even enjoy the change of seasons.
Businesses are relocating to States that have business friendly environments both from a tax perspective and a regulatory one. This is the reason why Michigan, California, New Jersey, New York, Illinois and the other high tax states are losing businesses to states like North Carolina, Arizona, Tennessee and the like.
The most interesting thing is that all of the States that are friendly to business are run by Republicans and the ones that are unfriendly to business are run by unions and the Democrats.
Mark:
You are naive if you do not recognize the importance of climate & lifestyle. As we are more affluent, those issues are all the more important.
Chicago's attributes mitigate it's long, gray, cold winters and hot, sticky summers. Still, there would not be a Scottsdale, it seems, if it were not for Chicagoland transplants. They did not come here for the tax regime.
The west offers four seasons with mild weather and sunny skies (the Rockies). One needn't endure the northeast or midwest for that lifestyle. High tax California's huge growth over the past 50 years does not support your thesis.
I respect the fact that the business climate is also important. The cost-of-living and wages are huge components in a location decision. Taxes are but one of many considerations. These days, Michigan will practically build your plant for you and forgive taxes for ten years. Unfortunately, that doesn't prevent the brightest M grads from heading to Chicago, NYC and California.
I briefly knew Bobby Kotick in the '80's who was going to start a tech company and was trying to decide if he should HQ in Michigan, where he could pay relatively low wages thanks to the low cost of living or if he'd need to go to high-wage California where the best talent was readily available. Today, he is the CEO of Activision, based in Santa Monica. I guess he made his decision.
I have given a lot of thought to the plight of the Rust Belt. I would love nothing more than to see a renaissance throughout the region. For the life of me, I can't think of a catalyst for such revitalization. If you think simply lowering taxes will do it, you are dreaming.
Post a Comment