Joseph L. Shaefer

California's High Tax / High Benefit Model: A Constantly Renegotiated Bargain

“That government is best which governs least.”

There is both a quality-of-life argument auguring in favor of these simple words and an economic one. As to the former, no one who believes in the nation envisioned by our Founding Fathers wants a more intrusive government prying, nanny-ing and enforcing arbitrary rules into our private lives.

But the economic argument is equally compelling and may be stated in the simplest terms via an analogy. All bookies depend upon the spread between opposing bettors and the bookies’ cut of your winnings or losings. Their ideal is to get a 50/50 betting pool where exactly half the bettors win and half lose. With their cut -- the vigorish, or “vig” – they live a fine life no matter what happens to the bettors.

The Los Angeles Times article asks and answers, “In what respects, then, does California ‘excel’? California's state and local government employees were the best compensated in America.” You cannot continue to raise the amount of vigorish taken or you will lose the betting public. We have a choice of bookies to use, and the article makes it clear that California is losing residents at a massive rate.

It is both disheartening and unnecessary. I was born in California. I attended a great California university, joined the Army and did my basic training in California, and still love the land there. Close your eyes and try to pick another state that can offer wonders like Yosemite, Carmel and Monterey, Shasta, the great breadbasket that is the Central Valley, Southern California beaches, the Giant Redwoods, San Francisco Bay, the Wine Country and the celebrated Sierra Nevada Mountains.

Yet with all those glories, I can no longer live there. Instead, I live a few minutes from the California border, high in the Sierra Nevada but in the magnificent western state of Nevada, a state where the level of regulation and level of taxes are a fraction of those in California – and the level of freedom and personal responsibility are orders of magnitude higher.

California leads the nation in physical beauty. It is blessed with a temperate and beautiful climate. Fresh clean water roars out of the Sierra every year onto some of the most fertile soil in the world. So how could this bounty have been lost? Taxes. Regulations. Overpaying ticket-takers and rubber-stampers while penalizing entrepreneurs and employers.

The tragedy is that it is completely self-inflicted. But the trend is not yet irreversible. California could once again be the leader in education, innovation, entertainment, agriculture, and energy that it once was. It is this generation’s object lesson that the type of governance we choose makes all the difference in the world.