Filed under: Economy, Education, Energy, Environment, Progressivism, Taxes | Tags: High State Taxes, High Unemployment, Lousy Business Climate
One of the best indications of a state’s economic health is the U-Haul Index, first publicized by economist Mark Perry. It shows what people are paying to move into or out of a state. Renting a 20-foot truck one way from San Francisco to San Antonio, Texas for example, costs $1,693. Renting the same truck with San Francisco as the destination costs only $983.
As Perry explains:
The American people and businesses are voting with their feet and their one-way truck rentals to escape California and its forced unionism, high taxes, and high unemployment rate for a better life in low-tax, business-friendly, right-to-work states like Texas.
Texas has no individual or corporate income tax, and a lower sales tax. Texas’ state and local tax burden is less than eight percent of income, well below the national average. California’s is almost twelve percent. But it isn’t just taxes. California’s regulatory environment and huge deficits are chasing companies out-of-state. California is the testing ground for President Obama’s ideas of post-economic liberalism. All Obama’s dream programs are here — cap and trade (the first sale was a disaster), massive taxes on the rich, huge investment in unwanted high speed rail, lots of wind and solar, environmental regulation has decimated the great Central Valley in the name of the Delta smelt.
The state’s efforts to redistribute the wealth from those who earned it to those who didn’t, have resulted in California, which has 12% of the country’s population but a full one-third of the nation’s welfare cases.
Since 1990, California has lost nearly 3¼ million residents, most of them moving to Texas, Nevada and Arizona. A study from the Manhattan Institute blames the exodus on “chronic economic adversity,” fiscal instability, population density (Los Angeles and Orange County have nearly 7,000 people per square mile, more than New York or Chicago), taxes, regulation, high-priced power, high labor costs, the high price of housing and commercial real estate. And the unemployment rate at 10.9 percent is dismal. In the U-Haul Index, California has been rated dead last for the eighth consecutive year.
Each year the evidence grows that people and businesses are leaving California or avoiding locating there because of the high cost of doing business due to excessive state taxes, excessive regulations, and an inability of state government to understand the nature of the problems they are causing.
The U-Haul index demonstrates that more and more people are willing to pay extra to get out of California.
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American Elephants 
A friend of mine recently moved from Palo Alto, CA, to College Station, TX. In terms of actual pay, he took about a $14,000.00 cut. In terms of taxes and differences in cost of living, he explains that he actually got a 30% raise. For less than half of what he was paying to live in Palo Alto (he worked at Stanford) he has a larger house with a lawn. And (he says), since the schools are better there, he no longer has to pay a tutor to help his kids.
He’s taken some heat from some of his former colleagues (“You’re moving WHERE?”), but he explained that with all of the uncertainty and high cost of living where he was, he just couldn’t stay and afford to raise a family.
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Comment by Lon Mead November 25, 2012 @ 10:36 pmI left California (southern) over 30 years ago. Even then, the schools were hiring new teachers because they were cheaper, then letting them go before they had to offer tenure. New housing tracts had recently quit offering two side-yards, each house had one. Saved lot size. With apologies to all who love the Golden State, I truly hated it. Northern California was better, but not enough. I require mountains and timber.
How interesting that the left never understands that their decisions about raising taxes, increasing regulation, and increasing uncertainty actually have real life results.
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Comment by The Elephant's Child November 25, 2012 @ 11:34 pmI’m also an emigrant from the Golden State. My daughter and son-in-law have also bailed out (and she’s a liberal, Berkeley graduate) and my son is looking for work outside the state as well.
The key thing that our genius policy makers always forget is the one thing that has prevented a Second American Revolution for the past 200+ years is the federal structure of the country. You can “vote with your feet” to move to a more congenial tax-regulation-freedom environment.
I did a piece back in August for American Thinker about just that subject. You can find it there, or on my blog at
Keep up the great work.
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Comment by Jim Yardley November 26, 2012 @ 8:07 am