More Taxes or More Jobs? California Shows We Can’t Have Both

It’s hard to find a politician who isn’t eager to “do something” about high unemployment. Turns out California has found one way to save and create certain kinds of jobs—spend like mad and raise taxes. That job-creation strategy has worked quite well for government-sector workers. Problem is the statewide unemployment rate is still among the highest in the nation, and many private-sector employers are heading to states like Texas, where taxes are lower and regulations are lighter. “I would love to have companies calling me saying, ‘We’d like to move to California, can you help us with that relocation?’ I get none of those calls,” says business relocation coach Joe Vranich. “The calls I do get are, ‘Hello, we want to move out of California, can you help us do that?'” Vranich says there’s no one reason why businesses leave. He calls it “death by a thousand cuts,” where job creators get fed up with everything from high taxes to traffic gridlock and legal hassles. Take Rick and Jack Newcombe, the father-son team that runs Creators Syndicate. A long legal battle with the city of Los Angles might end up being their company’s final cut. The Newcombes say the city arbitrarily stuck the company into a higher tax category and officials are applying the hike retroactively. City officials are demanding $400000 in back taxes, but Rick Newcombe calls the whole episode “legalized theft,” adding that a tax penalty of that size would force the company to lay off 10 employees. It’s ironic

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