California v. Texas Again
November 07, 2009, 01:59 AM
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From City Journal:
The Big-Spending, High-Taxing, Lousy-Services Paradigm
California taxpayers don’t get much bang for their bucks.
In 1956, the economist Charles Tiebout provided the framework that best explains why people vote with their feet. The �consumer-voter,� as Tiebout called him, challenges government officials to �ascertain his wants for public goods and tax him accordingly.� Each jurisdiction offers its own package of public goods, along with a particular tax burden needed to pay for those goods. As a result, �the consumer-voter moves to that community whose local government best satisfies his set of preferences.� In selecting a jurisdiction, the mobile consumer-voter is, in effect, choosing a club to join based on the benefits that it offers and the dues that it charges.

America’s federal system allows, at the state level, for 50 different clubs to join. At first glance, the states seem to differ between those that bundle numerous high-quality public benefits with high taxes and those that offer packages of low benefits and low taxes. These alternatives, of course, define the basic argument between liberals and conservatives over the ideal size and scope of government. Except for Oregon, John McCain carried every one of the 17 states with the lowest tax levels in the 2008 presidential election, while Barack Obama won every one of the 17 at the top of the list except for Wyoming and Alaska.

It’s not surprising, then, that an intense debate rages over which model is more satisfactory and sustainable. What is surprising is the growing evidence that the low-benefit, low-tax alternative succeeds not only on its own terms but also according to the criteria used by defenders of high benefits and high taxes. Whatever theoretical claims are made for imposing high taxes to provide generous government benefits, the practical reality is that these public goods are, increasingly, neither public nor good: their beneficiaries are mostly the service providers themselves, and their quality is poor. For evidence, look to the two largest states in the nation, which are fine representatives of the liberal and conservative alternatives ...

State and local government expenditures as a whole were 46.8 percent higher in California than in Texas in 2005–06—$10,070 per person compared with $6,858.

However, that needs to be adjusted for differences in price level, which is significantly higher in California than in Texas due to higher land costs. They are both huge states, but the whole point of living in California is to live in the narrow Mediterranean climate zone near the coast. In contrast, the eastern half of Texas is all livable, so land prices are low.

California's real problem is that its residents, on average, don't earn enough money to pay for living in an inherently expensive state.

Clearly, Texas's low tax - low spend model is the only one that makes sense for a state or a country with a huge Latino population. That assumption was behind the Rove-Bush Invite the World model, but it proved disastrous in high-cost California, which dragged down the rest of the country.

The concept that Latinos don't earn enough to pay for an expensive government is pretty obvious, but it's just off the radar screen. The liberal media just see more NAMs as more justification for more government spending and more votes for government spending.