Share The Wealth Or Get Out Of Town

order times; font-size: 16px;”>By Gregory Welborn

viagra order times; font-size: 16px;”>With the first GNP growth clocking in at a whopping 0.1%, check the jury’s still out on the national economic recovery.  As an economist by early training, I personally believe the U.S. will continue to plod along in a forward direction.  There won’t be a double-dip recession at the national level.  But that same economic training tells me California may not be so lucky;  the California State Senate seems to be doing everything it can to push the Golden State backwards.

sb.1372

Senator Loni Hancock (D-Oakland), and California Labor Federation Chief Officer Art Pulaski held a press conference in support of SB 1372.

Let’s dispense with the theoretical issues before tackling the economics of insanity.  Some may be tempted to believe that fairness demands there be some limit to what those on the top can earn vs those on the bottom.  Nobody can come up with a real reason why there should be a limit.  They just assume that inequality is bad without trying to understand why the inequality exists.

As a conservative, I’d be the first to argue against a system of government enforced rules which reward a chosen group of people at the expense of others.  That type of economic inequality would be unfair.  But inequality stemming from differences in life choices, education, intelligence and work ethic is not inherently immoral.  In fact a strong moral argument in favor of such inequality can be made.

In a free society, as long as everyone is free to pursue their goals using the talents God has given and the skills they develop through education and experience, we should expect unequal outcomes and actually celebrate the attainment of success – even spectacular success.  We shouldn’t punish it.

As a conservative, I cheer the stories of poor immigrants who sought, found and prospered in America, the land of opportunity.  I don’t think their success makes me or anyone else poorer.  In fact, we usually benefit from the innovations they’ve developed or the more customer-centric businesses they’ve built.  The technology we enjoy today is largely the result of people pursuing economic inequality.  Neither Bill Gates nor Sam Walton pursued poverty.  I do not in the least begrudge them their wealth.  I thank them profusely for their products and stores.  To take away their gains simply because we don’t like the level they attained is petty envy – one of the seven deadly sins – not a noble virtue.

Now to the economics of insanity.  Did anyone notice Toyota’s announcement they were closing up shop in California to move their headquarters (along with 5,000 jobs) to Texas.  Tax rates and an insane regulatory environment were the cause.  For those who missed the recent announcement, it read a lot like Nissan’s 2006 announcement when it left California for Tennessee.  Even the Liberals of Hollywood are not inured to high taxes.  California is losing market share in movie and television production.

In an interconnected national economy, and now the growing connectivity of the world economy, local tax rates matter.  The U.S. is losing companies, or at least economic activity, to other countries with lower tax rates.  The U.S’s combined average state-federal tax rate is nearly 40% compared to the global average of 24%, not to mention specific countries where rates are in the teens.  As a result, companies like Pfizer announce they will increase production or invest in new ventures in other countries, rather than in the U.S.  Pfizer is investing in Britain to reduce taxes.  Within the U.S. economic activity and investment gravitates to the states where taxes are lower.  I’m sure there’s little love-loss between Governors Brown and Perry, but the fault lies with California, not Texas. 

The unavoidable message in Senate Bill is 1372 is that if you stay in California, Sacramento will reduce your profits – either taking them in taxes or forcing you to give them away.  We shouldn’t be surprised when companies decide not to stay in California and instead take the hint to get out of town.

You can find the complete text of the SB 1372 : Here

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Gregory J. Welborn is a freelance writer and has spoken to several civic and religious organizations on cultural and moral issues.  He lives in the Los Angeles area with his wife and 3 children and is active in the community.  He can be reached [email protected]

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2 Responses to Share The Wealth Or Get Out Of Town

  1. William "Bill" Hicks May 3, 2014 at 8:40 am

    I’m not an economist; but maybe I am. I don’t spend more than my income and I don’t borrow beyond my ability to pay my bills.

    Does that make me an economist?

    Reply
  2. Citizen Reporter May 2, 2014 at 10:10 am

    De facto organic GDP is actually decreasing at about -12%:
    – A billion a year is just borrowed.
    – The true inflation rate approximates 6%

    Reply

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