Last month, California’s unemployment rate fell to 7.8 per cent.

In Texas, the unemployment rate fell to 5.2 per cent.In 2011-12, California’s high school graduation rate for Hispanics was 73 per cent. For African-Americans it was 66 per cent.

In Texas, the 2011-12 high school graduation rate was 84 per cent for both Hispanics and African-Americans. The total graduation rate was 78 per cent for California and 88 per cent for Texas.

Income tax rates? California’s top income tax is 13.3 per cent. In Texas, it’s 0 per cent. Corporate tax rates in California are also significantly higher than in Texas, where the top rate is 1 per cent . Additionally, living costs in Texas are some of the lowest in America.

Consider what one CEO who moved his company from California to Texas told Reuters. That it took him “16 months to design and build a new, 11-story building in Texas, including eight weeks for permits. He estimated it would have taken three years just to get the permits in California.” The permit process in California is notoriously inefficient. Last year, Texas issued twice as many permits as California.

Then there are the future costs.

One respected energy consultant reckons that California’s new environmental regulations will increase electricity prices by an inflation-adjusted 47 per cent over the next 16 years. In Texas, government’s embrace of the energy boom has meant the state is awash with well-paying jobs.

Oh, and don’t forget California’s public pensions crisis. Together, state and local governments have an estimated liability of 5 billion. That’s bigger than the GDP of Switzerland.As the Manhattan Institute shows, many Californians are jumping ship. It’s telling that Texas has been the favoured destination of choice. Indeed, when liberals like Bill Maher are complaining, you know there’s a problem. Here’s how he put it:”Liberals, you could actually lose me. It’s outrageous what we’re paying [in taxes]. Over 50 per cent. I’m willing to pay my share, but yeah, it’s ridiculous.”Yet west coast liberals continue to bury their heads in the sand. They quote economists like Thomas Piketty, Peter Diamond and Emmanuel Saez. Diamond and Saez, for example, claim that government can take 73 per cent of a top earner’s income without significantly discouraging his/her continued economic activity. It’s worth noting that liberal studies seem to focus on complex mathematical equations rather than the statistical analysis of reality.Because reality is clear. Just look at Europe’s recent history of wealth-soaking experimentation. Labour’s 50 per cent tax rate? Many top earners simply relocated their assets and abilities. The Coalition recognised the error and reduced the rate. Then there’s France. As I’ve argued before, the socialist government of Francois Hollande has led the fifth republic into an economic abyss. Now, facing an impressive approval rating of 18 per cent, Hollande has reversed course and plans to reduce business taxes. If you think I’m exaggerating about France’s problems, read this account by a French journalist. The underlying lesson is clear. In the 21st century, human capital will move to the place of best returns.If taxes don’t matter, why do accountants and tax lawyers exist? Why do states offer relocation incentives to new companies? Why have so many sports stars abandoned California?Regardless, it’s no longer deniable. California has big problems.
via High-tax California v low-tax Texas: a tale of two states – Telegraph Blogs.