ONE EFFECT OF HIGH TAXES IN CALIFORNIA: COMPANIES LEAVE

NOTE: Back to business today after a great Thanksgiving Day with family and friends yesterday. Still, I hope every day would be one in which we would give thanks for various blessings even as we watch our current political system careen from one issue to another.

PERSPECTIVE FROM THE 19TH HOLE: This is the title I chose for my personal blog, which is meant to give me an outlet for one of my favorite crafts – writing – plus to use an image from my favorite sport, golf. Out of college, my first job was as a reporter for the Daily Astorian in Astoria, Oregon, and I went on from there to practice writing in all of my professional positions, including as press secretary in Washington, D.C. for a Democrat Congressman from Oregon, as an Oregon state government manager in Salem and Portland, as press secretary for Oregon’s last Republican governor (Vic Atiyeh), and as a private sector lobbyist. This blog also allows me to link another favorite pastime – politics and the art of developing public policy – to what I write.

The Wall Street Journal – and other news outlets – reported a fact that ought to give left-leaning, tax-everybody liberals in California second thoughts.

The brokerage firm, Charles Schwab, decided to merge with TD Ameritrade and move the joint firm’s headquarters from California to Texas.

One reason?

High taxes.

Here’s what Wall Street Journal editorial writers said:

“Schwab will pay much lower taxes in Texas. The Lone Star State imposes a 0.75 per cent franchise tax on business margins (total revenue minus compensation), which is substantially less than the corporate tax rates in California (8.84 par cent) and Nebraska (7.81 per cent), where TD Ameritrade is currently headquartered. The city of San Francisco also imposes a 0.38 percent payroll tax and a 0.6 per cent gross receipts tax on financial service companies.

“Texas has no individual income tax, while the top rate on income and capital gains in California is 13.3 per cent, and the Lone Star State’s housing and energy costs are substantially lower. The average monthly rent in San Francisco is $3,870 compared to $1,200 in Dallas. Schwab workers and executives can have a higher standard of living, and more after-tax income, at the same salaries.”

What California liberals fail to realize is that, as they impose tax after tax to grow government, they sometimes achieve the opposite. Businesses that pay taxes and hire staff who pay taxes have options to leave in the face of those high taxes.

So, liberals lose.

They lose the revenue that would result from a lower, fairer tax structure.

It is a point I hope government officials in Oregon will consider, even as more taxes are imposed on businesses in a structure developed by the Democrats who are in charge across-the-board here.

Put another way, I hope what I call “the jobs issue” would take a high profile.

Government – both the Executive and Legislative Branches – should place a high value on jobs, either retaining them when they exist, or creating environments to help business establish new ones.

Two reasons.

First, those who hold jobs pay taxes to help fund government – and that should matter to all political figures on both the left and the right.

Second, for me, there is no better social program than for citizens to hold jobs and gain the benefits that result – money to fund their own existence and maintain their families without having to resort to government programs. Those programs that clearly have their place for individuals and families that are unable to find and keep work.

The lessons of Charles Schwab’s flight to Texas ought to carry lessons for California – and, by extension, for Oregon.

 

 

 

 

 

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