Quote:
Originally Posted by raymor
I don't understand why everyone treats this stuff as theory and argues about what could happen. For many years fifty different states tried fifty different things. Texas has long had zero income tax. California tried high taxes. California has 40% more people out work than Texas does.
There's no chicken and egg philosophical quandary here. We tried both, fifty times. Low tax states kicked the crap out of high tax states. Of the ten best cities to get a job, three are in Texas, the no-tax state. None are in California, the similarly sized high tax state. That's not theory, that's what actually happened.
It's like arguing who might win the 2010 Super Bowl. New Orleans won. Nothing to argue about.
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I think there is a lot more to comparing those two states than just taxes.
For starters cost of living and, for that matter, cost of just about everything, is higher in California than in Texas. Also Texas has all that oil revenue and jobs which is very stable.
As for the unemployment always being higher in California. That simply isn't the case. If you look at the number between 1990 and 2008 they are pretty comparable. Other than a 3 year period from 82-85 California's unemployment rate tends to hover between 5-6.8%. Texas is pretty comparable with most years falling somewhere between 5-8%. In 2008 when the recession hit they both went way up.
Today the unemployment rate in Texas is 6.9%. Which is lower than the national average of 8.1%, but the state of Washington which also doesn't have a state income tax is 8.1%. For that matter Nevada has no income tax and they have the highest unemployment rate in the nation at 11.7%.
To me this proves that there is a lot more to unemployment rate than just taxes. . .well, at least just income taxes.