California has become a nightmare. The beauty is still there in the majestic
hills, the rolling meadows, and the breathtaking canyons. It’s too bad that the
whackos have spoiled the state, turning it into an incubator for all that’s
wrong with liberalism. It’s no wonder that California is one of the least business-friendly states in
America. On regulations, employment, labor, hiring, tax code, and licensing, it
gets an F and a D on ease of starting a business.
While getting ready for a business meeting, I turned to a news channel and
saw California Lt. Governor Gavin Newsom and Art Laffer, Supply-Side advocate
and author of Eureka!: The Way to Fix California, being interviewed by
Larry Kudlow on “The Kudlow Report.” They were talking about how to fix
California’s $16 billion budget shortfall.
Gov. Jerry Brown wants to trim some programs (a good idea) and raise taxes (a
Laffer’s comment was on the money: “You can’t tax a state into prosperity.”
Kudlow wanted to know how New Jersey could get its budgetary house in order
without raising taxes but California couldn’t. Even Puerto Rico was able to do
When Luis Fortuno became governor in 2009 the Commonwealth of Puerto Rico
didn’t have enough money to pay its bills. The first thing the new
administration did was to cut 17,000 government workers, freeze all salaries,
and cut government spending by 20 percent.
As expected there were protests in the streets. The governor held firm. He
knew that a little pain now would result in great benefits in the future. He
didn’t stop with cuts to government employee waste. He went on to cut corporate
taxes and state income taxes.
Now that Puerto Rico is a tax-friendly region, businesses are moving in. As
Stossel reports, “Wal-Mart, CostCo, Coca-Cola, and pharmaceutical companies
are moving to or expanding in Puerto Rico. Soon, they will provide thousands of
Gov. Brown wants the people of the California to vote for a “temporary” tax
increase. The people who will vote yes will be voting to tax the other guy,
spending will still go up, and the tax increase will become permanent.
What will businesses do if Californians vote for a tax increase “on the
rich”? Move to more tax-friendly states. They might even try Puerto