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.