Texas Governor Rick Perry recently made a much-publized tour of California, meeting with business leaders and promoting his state's pro-business climate. CA Gov. Jerry Brown dismissed the tour as a "political stunt." He might want to take the threat more seriously. IA Gov. Terry Branstad has announced his own tour of California, talking to businesses about moving to his state.
“What we do," Branstad told the Associated Press, "we call on companies that already have an investment here, and we call companies that are prospects.” He argued that Iowa's efforts to reduce commercial taxes should make it attractive. Branstad described California's economic plan as "if it doesn't move, tax it."
Last November, CA voters approved a package of "temporary" tax hikes promoted by Brown. The state is also set to begin enforcing strict new emission standards, which will likely prompt increases in energy costs. The Democrats won supermajorities in both chambers of the Legislature, raising the prospects of new taxes and regulations.
A number of states are pursuing aggressive reform measures. Several are even looking to revamp their tax codes and even scrap their income taxes. Other states, like California and Illinois, by contrast, are pursuing their traditional tax-and-spend policies to address their economic challenges.
The country will soon learn which is the better path to prosperity.
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