A Tale of Two States: Texas vs. California

...You couldn't have two states moving in more opposite directions. One is unabashedly pro-growth and aggressive in courting industry, while the other seems content to spin an ever denser spider web of laws, regulations and red tape that is driving business out of the state. One state accounts for a whopping 70 percent of all jobs created in the United States last year, while the other seems bent on increasing taxes on business and individuals to pay for an unsustainable, out of control government that wants to be everything to everyone despite the fact that it simply cannot. This doesn't mean that Texas doesn't face very real problems in the current recession: they do, as Brendan Case at the Dallas Morning News blogs here. But even so, the silver lining for Texas is that the recession will nick the Lone Star State while it gouges the Golden State. California's addiction to funding ongoing programs through debt financing, its permanent structural deficits on the horizon, its fondness for taxation, and other governance weak suits will really hamper the economic recovery in the state, ensuring it will occur long after Texas is off to the races. Hence, it's good to see a direct Texas vs. California comparison drawn out in the American Legislative Exchange Council's updated Rich States, Poor States report. The full report is worth a read, but I found the comparative analysis of tax and regulatory climate between the two states to be particularly illuminating. Here's the takeaway: Matched up in a head-to-head competition, Texas’s economic environment beats California’s – in fact, it is a knockout. [...] California continues to increase regulations, raise taxes and spend profligately. These anti-growth policies will continue to sap the economic vitality of California. Texas, on the other hand, has a pro-growth economic environment with a competitive tax system, sound regulations and spending discipline that will help Texas maintain its superior economic performance well into the future....Reason Foundation