Why Rick Perry Is So Wrong About California And New York

Texas Gov. Rick Perry (R) was the standout star at the Conservative Political Action Conference this year, in no small part because of his impassioned plea for Americans to recognize that the fate of the U.S. comes down to a battle of visions between Red vs. Blue states.

To make his case, he held up Texas as a shining beacon of low taxes and high job growth. His punching bags? California and New York, the two biggest Blue states in the country.

"If you rent a U-Haul to move your company, it costs twice as much to go from San Francisco to Austin than the other way around," joked Perry. "Because you can't find enough trucks to flee the Golden State."

"And New York has got this new advertising campaign," he continued. "The new New York. But they're implementing the tired old recipe of back-breaking taxes and yeah, you guessed it -- regulations that are larger than a 30-ounce big gulp."


But not everybody is buying Perry's claims. In a feature for the Washington Monthly magazine, senior editor Phillip Longman expertly dismantles the so-called "Texas Miracle," the state's recent business and job boom, point by point. We encourage you all to read it in full. For a taste of what's in store, here are just a few of Longman's points, which in fact are perfect rebuttals for the claims Perry made about Texas during his CPAC speech. To be honest, the Lone Star State isn't looking so good right now.

Claim: "The Red State America vision: where the freedom of the individual comes first, where the reach of government is limited. In these states, taxes are low. Spending's under control. Jobs are on the rise and opportunity is being sought far and wide." - Rick Perry

Truth: Texas is not the land of opportunity -- especially compared to California. Longman shows why.

In the San Francisco Bay Area, for example, children who grew up in families in the bottom fifth of the income distribution had only a 12.2 percent chance of rising to the top fifth as adults. Those who grew up in or near San Diego or Los Angeles had even lesser odds—only 10.4 and 9.6 percent, respectively. It’s depressing that for so many Californian children, the chances of realizing the American Dream are so slim. But California looks like the land of opportunity compared to Texas.

In the greater Austin area, children who grew up in families of modest means had only a 6.9 percent chance of joining the top fifth of earners when they became adults; in Dallas, only 7.1 percent; in San Antonio, just 6.4 percent. Yes, Texas offers more chances for upward mobility than places like Detroit and some Deep South cities like Atlanta. Yet the claim that Texas triumphs over the rest of America as the land of opportunity is all hat and no cattle. Children raised in the postindustrial wasteland of Newark, New Jersey, during the 1980s, it turns out, had a better chance of going from rags to riches than did children born in Houston, which was the best city in Texas for upward mobility during that time.

Claim: "[Texas] cut taxes, we didn't spend all the money, we created fair and predictable regulations and we stopped personal injury trial lawyers from filing frivolous lawsuits." - Rick Perry

Truth: Working and middle class Texans could actually end up paying a higher percentage of their wages in taxes than Californians, while getting a lot less in return. From Longman:

Oh yes, I know what you’ve heard. And it’s true, as the state’s boosters like to brag, that Texas does not have an income tax. But Texas has sales and property taxes that make its overall burden of taxation on low-wage families much heavier than the national average, while the state also taxes the middle class at rates as high or higher than in California. For instance, non-elderly Californians with family income in the middle 20 percent of the income distribution pay combined state and local taxes amounting to 8.2 percent of their income, according to the Institute on Taxation and Economic Policy; by contrast, their counterparts in Texas pay 8.6 percent.

Middle- and lower-income Texans in effect make up for the taxes the rich don’t pay in Texas by making do with fewer government services, such as by accepting a K-12 public school system that ranks behind forty-one other states, including Alabama, in spending per student.

Claim: "From the east coast to the west coast, no two states have lost more personal income to other states than New York and California." - Rick Perry

Truth: Thanks to high immigration rates and a high birth-rate, Texas has one of the nation's fastest growing populations, writes Longman. It's not, as Perry claims, because people are fleeing from other states.

But in the conservative narrative, this population growth is largely driven by individual Americans and businesses fleeing the high taxes and excessive regulation of less-free states. In other words, Texas’s rate of job creation is supposedly more a cause than a consequence of its population growth. If that were true, the Texas boosters would be right to brag. But among the many problems with this story is the reality that, even with an oil boom on, nearly as many native-born Americans are moving out of Texas as are moving in.

For example, according to Census Bureau data, 441,682 native-born Americans moved to Texas from other states between 2010 and 2011. Sounds like a lot. But moving (fleeing?) in the opposite direction were 358,048 other native-born Americans leaving Texas behind. That means that the net domestic migration of native-born Americans to Texas came to just 83,634, which in a nation of 315 million isn’t even background noise. It’s the demographic equivalent of, say, the town of Lawrence, Kansas, or Germantown, Maryland, “voting with its feet” and moving to Texas while the rest of America stays put.

Head over to the Washington Monthly to read more of Longman's argument against the "Texas Miracle."


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