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Consequences

A lot of jobs are moving from California to Texas. So many that there is a delegation from California visiting the Lone Star State to try to figure out why. From Mark Perry at Carpe Diem:

California (-1.15m jobs) Goes On a Trade Mission To Beg Texas (+165k jobs) for Its Jobs Growth Recipe



"When California Lieutenant Governor Gavin Newsom begins meetings in Austin with Hardee�s hamburgers chief Andrew Puzder, local Chamber of Commerce Chairman Bobby Jenkins and Texas Governor Rick Perry, it�s because the most- populous state lingers in a funk, even as the U.S. pulls out of the deepest recession in half a century.

The world�s eighth-largest economy has lagged in job growth since California-based lenders such as Countrywide Financial Corp. led America into the housing bust. Unemployment in the state is 12.2 percent, more than a third higher than the national average. While signature industries such as technology, trade and tourism have rebounded, construction and government employment are weak or falling.

Newsom is one of two California Democrats in the talks starting today on how the Lone Star State created 165,000 jobs over the past three years, while California, with the country�s largest workforce, lost 1.15 million (see chart above)."

Excuse me but DUH??? Increase the hassle-factor for people trying to run a business and above a tipping point, they will either shut down the business, reduce the size of the business or move the business to a state with less hassle-factor. Haven't these idiots ever heard of the Laffer Curve:

In economics, the Laffer curve is a theoretical representation of the relationship between government revenue raised by taxation and all possible rates of taxation. It is used to illustrate the concept of taxable income elasticity (that taxable income will change in response to changes in the rate of taxation).

The best rate in the USA seems to be at around 20% to 30% taxation. Posted by DaveH at April 16, 2011 12:42 PM