The Glitter Fades from the Golden State

You know the jig is up when the Los Angles Times twigs to something like this.

The Golden State isn’t worth it
Our high-benefit/high-tax model no longer works, especially compared with low-tax states like Texas.

By William Voegeli
Los Angeles Times

In America’s federal system, some states, such as California, offer residents a “package deal” that bundles numerous and ambitious public benefits with the high taxes needed to pay for them. Other states, such as Texas, offer packages combining modest benefits and low taxes. These alternatives, of course, define the basic argument between liberals and conservatives over what it means to get the size and scope of government right.

It’s not surprising, then, that there’s an intense debate over which model is more admirable and sustainable. What is surprising is the growing evidence that the low-benefit/low-tax package not only succeeds on its own terms but also according to the criteria used to defend its opposite. In other words, the superior public goods that supposedly justify the high taxes just aren’t being delivered.

Nor can they be.

The only sector in California which has flourished has been State Employees, which is in effect a second tax on the “services” they provide.

The result? People and business are voting with their feet:

One way to assess how Americans feel about the different tax and benefit packages the states offer is by examining internal U.S. migration patterns. Between April 1, 2000, and June 30, 2007, an average of 3,247 more people moved out of California than into it every week, according to the Census Bureau. Over the same period, Texas had a net weekly population increase of 1,544 as a result of people moving in from other states. During these years, more generally, 16 of the 17 states with the lowest tax levels had positive “net internal migration,” in the Census Bureau’s language, while 14 of the 17 states with the highest taxes had negative net internal migration.

As a third generation native of California who has lived in several (10) states (including both California and Texas), I have to say the temptation to once again vote with my feet is strong.

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