A state fast becoming America’s version of Greece.
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Even California Governor Jerry Brown recognizes that the state’s tax system leads to up-anddown revenue cycles that hurt its economy. Its steep progressive tax system means that the top 1 percent of income earners pay between one-third and half of all state income tax revenues. Brown acknowledges that depending on the rich to pay the bills causes “more volatility” in revenue collections and thus “a more or less constant state” of deficits. Nonetheless, Brown is supporting the tax increase on upper earners on this November’s ballot.
CALIFORNIA’S AGONIES are likely to continue. But the Chief Executive survey contains good news for states that have the courage to implement real reform. For years, Louisiana’s policies were hostile to business and caused the state to lose population every year. But GOP Governor Bobby Jindal has aggressively moved to change that. In 2006, in the wake of Hurricane Katrina, the Chief Executive survey ranked Louisiana 47th in business climate—on the same level as Massachusetts. Now the state has moved up to 13th place, rising from last year’s 27th place—an astonishing turnaround.
Wisconsin, one of the most unionized states in the country, is also showing how just a few common- sense reforms can dramatically change business perceptions. Republican Governor Scott Walker has trimmed regulations and wiped out a budget deficit by reforming collective-bargaining laws so local governments can save money in contract negotiations with their public employees. The result is that the state’s business climate is now in the top 20—the first time that’s ever happened.
Asked by Chief Executive exactly why he thinks it so important to reduce business costs in his state, Governor Walker replied: “I’ve never seen a store get more customers by raising its prices, but I’ve seen customers knock down the doors when they cut prices.”
Of course, Governor Walker’s policies are still controversial—he faced a June 5 recall effort heavily promoted by public employee unions. The reason his victory is so important is that it sends a message to other governors that reform is not only possible, but that it will be validated by voters. Had he lost, far too many governors and other leaders would have concluded that the best political course is not to shake things up and leave the biggest problems for their successors.
* A quotation from the CEO of CKE Restaurants, which owns Hardee’s and Carl’s Jr. brands, originally overstated the company’s growth in Texas. CKE plans to have 350 restaurants open in the Lonestar State by the end of the decade.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
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It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
Was the President done in by the economy, or by the politics of the economy?