Businesses and middle-class moving to low-tax states

A new Census report says United States population growth fell to an 80-year low in the last year, but some states are seeing booming growth despite the overall slowdown.

The eight fastest-growing states were Nevada, Idaho, Utah, Arizona, Florida, Washington, Colorado and Texas. Of those eight, seven were listed by the Bureau of Labor Statistics as having the highest job growth (Idaho missed the cut).

The bad news for California is that the growth appears to be driven by low taxes and business-friendly policies. Nevada, Texas, Washington and Florida have no state income tax, while the top rate in California is 13.3 percent.

There is an exodus of middle-income residents from our state, which has been masked in overall numbers by immigration. But in the last year, more people moved to other states than moved in from other countries.

In the last decade, about 13,000 companies left California and 275,000 jobs went with them, according to a study just released by business relocation consultant Joe Vranich.

Is California doomed?

Its options are limited by the dominance of tax-and-spend Democrats in Sacramento. Any attempt to reduce the tax burden on businesses or encourage investment is sure to be derided as “tax cuts for the rich,” a non-starter with the current crop of California leaders.

So the economic hardship that comes from driving businesses out of the state is likely to be met with more programs to assist people who are hurting, while raising taxes on people who are packing.

One thing California could do to improve economic growth and create high-paying jobs is develop its energy resources more aggressively. In 2017, the Golden State produced about 174 million barrels of crude oil, fourth in oil production behind Texas, North Dakota and Alaska. But increasing oil production would conflict with California’s agenda of 100 percent renewable energy, so that’s probably not an option, either.

So we could encourage businesses to stay with regulatory and tort reform. That would reduce the cost and hassle of operating a business. Or we go down the current path, taxing, spending, borrowing, passing more laws and waving goodbye to the neighbors.

Source: https://www.ocregister.com/2019/01/06/businesses-and-middle-class-residents-moving-to-low-tax-states/