California’s adventures into socialism and high taxes teach us a good lesson so that other States can avoid the mistake, and perhaps even save our Country the agony of living through it.  California ranks 48th in terms of its business tax climate.  I prefer to say it this way: California is the 2nd most punitive State to run a business in. I’m sure many of California’s leftists (and there are many), do not see this as a problem.  However, when businesses run away to other States that’s fewer jobs (and yes, evil Republican business owners) that the State can rely on.

Excessive social spending doesn’t help matters either.  It’s a massive drain on the already suffering economy and it does nothing to encourage people to move to the State.  When times were better, California should have been building up a cash reserve to deal with rainy days like today.  Instead, the legislature totally leveraged the State to win leftist voters.  Worse, the response to the recent economic crisis by the legislature was to raise taxes even further.

With a progressive tax code that essentially begs millionaires to leave, and a corporate income tax that ranks 6th highest in the nation, it would appear that California has done everything it can to chase money out of the State.

Tax budgeting is counter-intuitive by nature.  It requires legislators to often do exactly the opposite of what would seem logical to the uninitiated.  Raising taxes always discourages an activity.  Raising taxes on rich people and businesses encourages rich people and businesses to find a new place to live…and find a new place is exactly what they’ve done.  Until California reverses course on tax policy and social spending policy, they can expect more of the same results they have been getting.