Just How Bad is California’s Business Climate?
Le·gal In·sur·rec·tion by Leslie Eastman
It is so bad that even New York is now trying to poach businesses from the Golden State.
….California’s governor hasn’t been nearly as dismissive of a television commercial promoting New York’s business climate that aired here in the Golden State during December.
“With over $1 billion in new incentives and tax breaks, this is an economy that launched over 50,000 new businesses last year alone,” the TV spot boasted. “Find out how to move or grow your business,” it concluded.
Now, the commercial didn’t directly mention the Golden State (perhaps out of New York Gov. Andrew Cuomo’s deference to Brown, a fellow Democrat). But it almost certainly was a shot across California’s bow.
I heard that ad this Christmas season, and even I was tempted to consider relocation. Then, I remembered:
But, I digress.
However, I will point out one of the most tempting aspects of the promotion was the “tax free zone” that was mentioned. The state’s governor Andrew Cuomo explained the shockingly free-market concept he plans to implement thusly:
“I mean no taxes. That’s what I mean when I say tax free – no business tax, no corporate tax, no franchise fee, no income tax,” Cuomo told officials at the University at Buffalo.
Under the measure, any new business that sets up on or near a SUNY campus, or at selected private universities or state-owned properties will pay no taxes for up to ten years. After five years, high-wage earners will have to pay income taxes. The locations are mostly upstate.
And how successful has this bold, new vision been? The economy seems better, even though the plan didn’t formally kick in until January 1st.
The unemployment rate in New York has dropped from 8.4 percent to 7.4 percent over the past year, and the state has 7.5 million private-sector jobs — an all-time high.
The housing market is coming back, with double-digit percent increases in home sales and median prices in October compared with a year ago.
…“Job creation numbers are up,” Cuomo said in an interview with the Albany Bureau. “Is it as much as anybody would want? No. But are the numbers up? Yes. And is the feeling better? Yes.”
It will be interesting to see where New York stands at the end of 2014.
How about California? My home state is an example of the “income inequality” that is the new mantra of progressives, as evidenced by a recent Wells Fargo report.
The uneven nature of the economic recovery is evident across California, with the coastal areas largely enjoying stronger job gains, reduced unemployment and more robust gains in home prices. The interior parts of the state have by and large not been as lucky, with meager job gains, stubbornly high unemployment rates and less of a rebound in home prices.
So, I suspect that at the end of this year, the major export of California will be residents.
That being said, San Diego citizen activists are in the midst of another petition campaign. The goal is to collect signatures to overturn the San Diego City Council’s decision to raise taxes on businesses by approximately 375 to 750 percent. Former Mayor Jerry Sanders explains:
This jobs tax could easily push us back into an economic recession. It will certainly cause some businesses to scale back or eliminate expansion plans, which will reduce job growth. Other companies will take their business — and local jobs — elsewhere and many more simply won’t consider moving to San Diego. At a time when our economy remains fragile, we cannot afford to put jobs at risk.
This jobs-killer also is a zombie tax because it will continue to automatically increase year after year without any review or approval by elected officials.
Hopefully, we will have the same sort of success as we had ousting Bob Filner. |
