How government policies impoverish Californians
Edward Ring of California Policy Center compares why of a family of four in Houston with the same salary is so much better off than their California equivalent.
"It’s common enough to discuss the high cost-of-living in California. It’s become a serious topic, at last. But for Californians who are used to paying ridiculous prices for everything, it may be helpful to present a comparison in the form of an annual family budget. How much does it cost to take care of a family of four in Los Angeles compared to Houston?
"The choice of Los Angeles is logical enough. One in four Californians live there. And while Los Angeles County may be more expensive than most of California’s inland counties, it is not cheaper than Orange, San Diego, or any of the nine counties of the San Francisco Bay Area. Altogether there are over 25 million Californians living in expensive coastal counties. Two out of three Californians endure the types of prices depicted here.
"The choice of Houston is also logical, not simply as a representative of cheaper Texas, but as a proxy for nearly all of the United States, with the only exceptions being those high-tax (usually coastal) metropolitan areas located in states run by progressive Democrats. In terms of the cost-of-living, Houston is an authentic stand in for most of America.
Reviewing the budget depicted below, the first thing to realize is that most people don’t have a household income of $100,000 per year. The median household income in California is $71,805. That means half of those 25 million people who have to live in places like Los Angeles have a household income that is less than $71,805. Let’s see how much it costs to a family of four to live in such a place.
“As can be seen, while Texas has no state taxes, the Californian gets a bigger federal deduction because of their much bigger home mortgage payments. Very roughly speaking, these factors cancel out. But where there’s a big deduction, there’s a big payment. The median price of a home in Los Angeles is a larcenous $617,000, whereas the same home in Houston will only set a family back by $189,000. Based on a 4 percent, 30 year fixed mortgage, this translates into a crippling $2,900 monthly payment in Los Angeles, vs a manageable $915 mortgage payment in Houston.”
This article originally appeared in the California Policy Center. Read the whole thing here.
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