Closed for business? The anti-business mythology of the Golden State (Berkeley: house, unemployment)

[user_id]

Originally Posted by ZhugeLiang

Even if you meant sales tax, you're still off. And there's no income tax.

His statement was accurate, the tax burden in California is around 2% higher than in Texas. This includes all taxes.

Texas has very high property taxes and it also has a gross-profit business tax, these make up for not having an income or corporate tax.

[user_id]

Originally Posted by randian

Some outsourcing? Silicon Valley used to be a manufacturing center for the goods designed there. Now pretty much all of it moved to other states or offshore. That needn't have happened. When you see billion dollar data centers being built in North Carolina and billion dollar fabs being built in Arizona, you know something's wrong with California.

No you don't. There are many reasons why a data-center isn't a good fit for California none of which have anything to do with government policy, in particular earth quakes and high real estate costs. There is also the issue of energy, the energy problems surrounding the Enron scandal made many high energy consumers worried about operating in California. There is also the issue of location, locations in the middle of the country are the best in terms aggregate speeds. As a result the largest data-centers are in Texas.

What makes the US great economically is that different areas can have different strengths and the country as a whole will benefit. The fact that businesses that need large amounts of space, have very high energy needs, populate a lot, etc often don't want to operate in California doesn't matter. California does very well in other areas, in particular with innovative start-ups. California still attracts far more start-up capital than any other state.

Anyhow, this is yet another thread about business in California by people that don't operate businesses in California.

[user_id]

Originally Posted by mateo45

Dunno about any specifically "hostile to business" practices, but I'd agree that there's generally a "culture" of anal-retentive bureaucrats in Cali, who often seem to feel "entitled" to treat the population they're paid to serve, with arrogance and disdain.

Really? How many businesses do you own? When I go to my city hall with a question I'm helped within minutes, greeted with a smile and the person makes every effort to answer my question(s). When I call the state or county to get something done, same thing.

When you treat city, state, etc officials with respect and understanding they will almost always treat you with the same. On the other hand if you treat them poorly from the start they are likely to use their powers to make your life difficult, they are after all just people and will react poorly to mistreatment.

[mateo45]

Originally Posted by randian

Why shouldn't they? Civil service rules effectively entitle them to act that way, it's not as if a civil service worker can be fired or demoted for treating the taxpaying public like trash.

In the early 20th century we (meaning the US, not just California) were suckered into thinking that a "professional civil service" would be better for us. Ha! Under the patronage system, when the new guy got elected he'd fire a bunch of people. That meant that you had to treat the public right, because if you didn't your boss would be ousted in the next election and you'd lose your job. Under the "professional civil service" system elections mean nothing, so government can't help but get progressively worse.

Agreed re: the advantages of a more "responsive" patronage system. Of course the downside there is the greater likelihood of getting these "banana republic" arrangements, along with more "payoffs" of one sort or another. Arguably, that's what much of the Bush years were about, where even seasoned bureaucrats who had weathered several different administrations, were replaced with "cronies". Like the infamous Katrina debacle, where the longtime (and experienced) FEMA head was replaced with Michael 'Brownie' Brown, the former "the kingpin of the Arabian horse world". Or to quote Dubya, "Brownie, you're doing a heckuva of a job!"

Perhaps instead, we treat civil "service" as an honorable long-term career, along with promoting a greater sense of "esprit de corps", similar to the way that the Highway Patrol tries to distinguish itself from other, more "local" law enforcement.

[randian]

Originally Posted by user_id

none of which have anything to do with government policy, in particular earth quakes and high real estate costs.

High real estate costs in California have a great deal to do with government policy.

[user_id]

Originally Posted by randian

High real estate costs in California have a great deal to do with government policy.

They can in principle, but there is little reason to believe that California's policies caused the housing bubble that just occurred. Other states, with rather difficult policies, experienced similar bubbles.

Nevada and California are almost popular opposites in terms of public policy, yet both had a housing bubble.

[.highnlite]

High real estate costs in California have a great deal to do with government policy.

If that were true one would expect Alturas Real Estate prices to be equivalent to prices in SoCal.

Or prices in East San Luis Obispo County right on the San Andreas Fault to be equivalent to prices in the City of SLO, or South County.

But, they aren't. Must be another reason, like, oh yeah,, the market.

Econ 101 high demand, high price, low demand, low price

Most expensive home currently for sale in Modoc County, $156,000

Average listed home price in my zip code, $642,000

[randian]

Originally Posted by user_id

His statement was accurate, the tax burden in California is around 2% higher than in Texas. This includes all taxes.

Texas has very high property taxes and it also has a gross-profit business tax, these make up for not having an income or corporate tax.

According to the Tax Foundation, in 2008, California's per-capita state and local tax burden was $5,028 on $47,706 of income, or 10.5%. Texas' per-capita state and local tax burden was $3,580 on $42,796 of income, or 8.4%. That's a cool 20% lower tax burden.

Texas' gross receipts tax is indeed awful, however, that's why Texas dropped from 6th to 13th on the Tax Foundation's State Business Tax Climate Index. Texas also dropped from 6th to 15th on their Unemployment Tax sub-Index.

[randian]

Originally Posted by .highnlite

But, they aren't. Must be another reason, like, oh yeah,, the market.

The existence of market forces in no way implies that government policy doesn't radically distort them.

[Vascodagama]

Originally Posted by user_id

They can in principle, but there is little reason to believe that California's policies caused the housing bubble that just occurred. Other states, with rather difficult policies, experienced similar bubbles.

Nevada and California are almost popular opposites in terms of public policy, yet both had a housing bubble.

The housing bubble happened all over the world.