Can we please learn a lession from California?

We knew this was coming. California is the most expensive state in the union. It was only a meeter of time before the other states worked out ways to entice companies away. That way is tax policy allowing companies to have tax breaks to move their businesses into states and bring the jobs, associated businesses and increase tax revenues with them.

California’s response was not to lower taxes but to try and raise them in 2006 to fund state run preschool. But it was ok because it was take from the rish and give to the poor. The Robin Hood feel good policy of the uneducated. (and well educated socialists). Those policies were consider ed risky in 2006 because they may create a greater incentive to leave the state.

Well another incentive came to pass, a shrinking economy. You see Democrats never look that far ahead. They don;t look at the side effects of policies. They see growing companies and profits and see money that they should take. They do not see new employees, service industries and the additional tax revenue. So they go after the companies and the ownership class within them. They did that so well that the companies where deciding if they should leave. Then the economy slowed, budgets got tight and the decision was made. They left, taking the tax base with them and California plunged into a recession.

The good here is that some states get it and those states are benefiting from the arrival of these companies. The problem is that California’s policies are likely to spread to Washington and California’s problems to th rest of the country. You see other countries have figured out the same thing as these states, cut corporate tax rates, bring in businesses and the tax revenues will follow.

Someday we will learn. I fear that day is a multi-year recession in front of us. But on the other side of that “malaise” will be fiscal responsibility and growth. At least I hope so.


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