Obama Policies Copy Moribund California, Not Texas
ByJohn Merline Investor’s Business Daily
Anyone who thinks that President Obama’s economic policies will spur strong growth should consider U-Haul rates between California and Texas.
Renting a 20-foot truck one-way from San Francisco to San Antonio, for example, will cost $1,693. But the U-Haul tab to go in the opposite direction is just $983.
To University of Michigan economist Mark Perry, who has tracked this “U-Haul Index,” the difference in these rental rates is the result of straightforward supply and demand.
Put simply, far more people want to leave California for Texas than vice versa. Why? Because California’s economy is moribund while Texas’ is thriving.
“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,” noted Perry, who is also a scholar at the American Enterprise Institute. American Enterprise Institute.
The problem is that Obama’s economic policies are pushing the country to be more like the California people are leaving and less like the Texas they’re flocking to.
“Every dream program that the administration embraces — cap and trade, massive taxes on the rich, high-speed rail — is either in place or on the drawing boards” in California, notes Joel Kotkin, executive editor of NewGeography.
Like President Obama, California’s Gov. Jerry Brown pushed for a substantial new tax on the “rich” that raises the top rate to 13.3%, a hike voters approved in November. Even before these taxes kick in, California was the fourth most heavily taxed state, according to a ranking by the Tax Foundation.
Also like Obama, the state is regulation happy. The Mercatus Center at George Mason University ranks California as one of the four worst states in terms of regulations. The state also imposes one of the heaviest tax burdens on businesses.
As a result, California consistently ranks at or near the bottom for business friendliness.
And like Obama — who has pushed federal spending up to historic highs for the past four years — per-capita spending in California has climbed 42% from 2000 to 2010, even after adjusting for inflation. The state is now one of the biggest spenders in the country.
The contrast in economic policies between California and Texas — which otherwise share many things in common, since both are big-population border states with lots of immigrants — could not be more striking.
Sandy-Ravaged New Jersey Families Face $6,933 Tax Hike in Fiscal Cliff Stalemate
(CNSNews.com) – Families in Hurricane Sandy-ravaged New Jersey will face the highest tax increase as a percentage of their income – 6.82% or about $6,933 more in taxes — if Congress does not reach an agreement on the fiscal cliff tax issues during the lame-duck session, according to an analysis by the Tax Foundation.
In its study of how the fiscal cliff would affect typical families in each state, the Tax Foundation reports that if the numerous tax provisions that are due to expire on Dec. 31 are not changed, a four-person family in New Jersey with a median income of $101,682 will see its taxes go up at a rate 6.82 percent of its income, which translates into about $6,933.
The tax issues in question are the expiration of the Bush tax rates, which also include the elimination of the 10 percent tax bracket and the reduced deduction for married filers; ending the 2 percent cut to employee-side Social Security taxes; and the Alternative Minimum Tax.
Maryland was ranked second by the Tax Foundation because a four-person family there, with a median income of $106,707, would see its taxes go up 6.74 percent as a percentage of income, or about $7,194.
Connecticut, ranked third, would see taxes for a family of four go up by 6.62 percent, or $6,653.
All five states with the top tax increases are “blue states” which President Obama won in the 2012 presidential election. But so are four out of the bottom five states with the exception of Kansas.
Top Five Tax Increases Tax Increases as % of Income
#1 – New Jersey $6,933 6.82%
#2 – Maryland $7,194 6.74%
#3 – Connecticut $6,653 6.62%
#4 – Massachusetts $6,632 6.53%
#5 – New Hampshire $5,660 5.81%
Forty states would see tax increases between $3,000 and $3,999. Six states would see an increase between $4,000 and $4,999 and three would see increases between $6,000 and $6,999.
New Hampshire would be the only state to see a tax increase between $5,000 and $5,999 and Maryland would be the only state to see a tax increase over $7,000.
Bottom Five Tax Increases Tax Increases as % of Income
#50 – Washington $3,362 4.12%
#49 – Hawaii $3,453 4.16%
#48 – Colorado $3,646 4.29%
#47 – Kansas $3,227 4.31%
#46 – Illinois $3,417 4.32%
The potential for tax increases on millions of U.S. taxpayers is still possible, the Tax Foundation explains, and would be especially devastating for lower-income families because of the changes to the child tax credit; the elimination of the 10 percent bracket, which would go back to 15 percent; and the reduced standard deduction for married filers — all of which are provisions in the 2001 and 2003 Bush tax cuts.