What happens when you charge more for a crummier product
As California's tax rate goes ever skyward, and the state's quality of life goes ever downward, guess what happens? People leave. David Bahnsen in National Review parses the grim data about the state's decline and offers a prophecy.
The 13.3 percent top tax rate for California’s highest earners is the highest state rate in the nation and is obnoxious. The state’s “middle class” tax rates are far and away the highest in the nation as well, also obnoxiously. One making $58,000 a year in California is in a marginal tax bracket (9.3 percent) nearly double that of someone in Arizona making over $500,000 a year (4.5 percent). When you look at the $116,000–$250,000 level that a middle-class, dual-income family would likely make in California, the 9.3 percent marginal tax rate is higher than almost every single marginal state rate in the country.
But there is no evidence that the declining appeal of staying in California is simply a tax protest. On top of being walloped by taxes, one takes fiscal hit after fiscal hit — property taxes that average $5,000 per year for a lower-end middle-class home with no frills and that can easily approach $10,000 per year for the most mundane of tract homes. Utilities, car registration, insurance, and education expenses are all in the top decile.
One is being asked to pay a lot more to live in California, and yet education results are abysmal, crime rates are unacceptable (the state has the 14th-worst rate of violent crimes per capita), the electricity grid is a debacle, and the job market has hollowed out. (The CEOs of great California companies have maintained homes in Menlo Park or Palos Verdes; recent factory or plant expansions of the companies have gone to Nevada, Arizona, and Texas.) The value of living in California has declined but the cost has not been correspondingly reduced; in fact, it has exponentially increased. A business cannot survive when it raises prices while simultaneously making a worse product. Neither can a state.
Read the whole thing here.
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