Study Reveals Low Taxes, Reasonable Regulations and Limited Government Create Superior Economic Environment, Increased Prosperity
Gov. Rick Perry today joined Dr. Arthur Laffer to unveil an economic study comparing two of the nation's economic heavyweights: Texas and California. According to the study, Texas' low taxes, reasonable regulations and limited government have created a superior economic climate with growth in income, wealth and employment projected to strengthen relative to California and the nation as a whole.
"Working with the legislature, we laid the foundation for today's economic success by creating a reasonable regulatory climate, competitive job creation fund and one of the lowest tax burdens in the country," Gov. Perry said. "Today we are reaping the benefits of these policies and are able to cut taxes while other states are cutting budgets."
Laffer's study compares Texas and California across six broad categories: taxes on labor income, taxes on capital income, taxes on consumption, overall tax environment, government spending policies and government regulatory policies. The study found Texas' economic environment more competitive than California's in five of the categories, and equal to California's in the sixth (taxes on consumption).
The governor credited controlled government spending and a reasonable tax environment with creating prosperity and attracting businesses to move to Texas, and emphasized continued government spending restraint and transparency.
The Laffer study adds to a growing list of accolades and accomplishments for Texas' economic climate and competitiveness. Over the past five years, Texas has created 1.2 million net new jobs and in the past 12 months, nearly half of all jobs created in the U.S. were created in Texas. The Lone Star State is also now home to more Fortune 500 companies than any other state in the nation. CNBC and CEO Magazine both ranked Texas the best state in the nation for business in 2008.
As a result of the state's strong economy and low unemployment, earlier this year Gov. Perry announced a $90 million tax cut for an estimated 370,000 Texas businesses in the form of a one-year suspension of the Unemployment Insurance (UI) replenishment tax.
To continue the state's economic prosperity, Gov. Perry established a Competitiveness Council to identify the challenges and opportunities impacting Texas. The concepts contained in the Council's report, released last month, represent an action-oriented roadmap that will keep Texas at the forefront of a global economy.
"We must continue to apply solid conservative fiscal principles to make Texas more competitive, draw even more investment, create additional jobs and sustain Texas as a beacon of hope," Gov. Perry said.
Today's event was hosted by the Texas Public Policy Foundation, Texas Association of Business and Texas Conservative Coalition Research Institute.