Lyle Newsroom 2011 Stories

Texan of the Year should be EPA chief Al Armendariz

Design Change

Is It Time to Rename the Texas Ratio?

Lasers Power Pentagon's Next-Gen Artificial Limbs

Weatherwatch - Can the intensity of a hurricane be predicted?

ABC's "Made in America" visits SMU

Lyle Team Places in National Competition

Technology and engineering to support work with refugees

My Steve Jobs

Steve Jobs: what we can learn from how he lived

SMU lab establishes research partnership with the U.N.

Hart Center partners with CCL to bring leadership development to all SMU engineering students

More Than Just Money

Moon and Back: Drake Frank

EEWeb Featured Engineer: Geoffrey Orsak

State Fined Company Named In FBI Search Warrants

Lyle School's Innovation Gym now supported by National Instruments and Lockheed Martin

Top Texas Engineering and Computer Science University Students Learn to Lead at Dallas Conference

California vs. Texas: Debating Their Economic Policies

Students Build Living Village for Math Credit

Acoustic Energy Harvesters Gaining Volume

Computer Science and Engineering Team Takes 2nd Place at Cyber Defense Competition

Engineering Students Debate the Risk/Rewards of Nuclear Power

Sustainable Village Comes to Life through Engineering

SMU Students Build Refugee Camp on Campus

Lyle Team Wins First Place in State Competition

Hunt Institute to Build Third World Village on SMU Campus

Humanitarian-Focused Engineering

SMU CSE Seniors Design and Sell SeekDroid App.

Talk To The Hand: A New Interface For Bionic Limbs

Texas Undergraduate Research Day

Dallas-area students envision and design tomorrow's personal entertainment wonders at Visioneering 2011

Hunt Institute representatives observe solar powered water systems in Kenya

Lyle Student Designs Surround Sound Fun in 3D

At the Lyle School of Engineering, Play is Hard Work

California vs. Texas: Debating Their Economic Policies

 

April 28, 2011

California is not only overtaxed and overregulated ("California Dreamin'—of Jobs in Texas" by John Fund, op-ed, April 22); it has the wrong kind of taxes. California's Proposition 13 cut property taxes, especially land taxes, while Texas relies on property taxes to a much greater extent.

Substantial taxes on land make land speculation unprofitable and prevent real estate bubbles from expanding too far. Also, no one rolls up his acreage and carries it to a state with lower tax rates or more inaccurate and outdated assessments.

California's high income and business taxes, by contrast, give people incentive to take their skills and mobile capital elsewhere. Low property taxes contributed to the real estate bubble being so severe in California. Proposition 13 not only limits tax rates, it prevents assessments from increasing as long as the property remains in the hands of the same owner.

Nicholas D. Rosen

Arlington, Va.


I don't know which is more discouraging: that Mr. Newsom fancies himself as "a pro-jobs Democrat" (now there's an oxymoron), or that some Democratic lawmakers would actually cancel their trips on orders from their major backers, the public employee unions.

In a prescient letter to the Journal headlined, "Golden State Drives Businesses Out" (Aug. 2, 2008), T.J. Rodgers, president and CEO of Cypress Semiconductor Corp., of San Jose, Calif., states Cypress had "closed both of our manufacturing plants in California." Further, he added, "And we are moving jobs out of California as rapidly as we can." Well, the sales tax "for the privilege of investing in the Golden State" was only 6% then; now it's around 10%.

When he was mayor of San Francisco, Gavin Newsom always considered it a privilege for any business to be based there, hence the 1.5% payroll tax the city levied should be palatable. I doubt that he has changed his stripes now that he's lieutenant governor of the state.

The delegation to Texas could have saved themselves the trip. California's taxes alone are enough to drive businesses out of the state, without all the added regulatory hurdles, and the taxes aren't going down here anytime soon. Meanwhile, Intel Corp. is building a new $5 billion plant—in Arizona. It will not be generating any tax revenue for the Golden State.

Don Crockett

Oakland, Calif.

Mr. Fund tells us much, but not all, of the story of California businesses moving to Texas. Mr. Fund notes that "Texas's overall spending burden remains below what it was in 1987—a remarkable feat." It's not so remarkable. We have a lot of children in Texas, so a great deal of money can be saved by cutting spending on education for these children, or limiting their access to medical care. You can also save money on education by having kids drop out of school before graduation. We do a good job of that in Texas. Mr. Fund stretches some to find a favorable comparison of Texas public schools to California's, a very difficult task, but he is able to note that Texas schoolchildren do not have to "learn the history of disabled and gay Americans." It is certainly tough to be rich in California but not as tough as it is to be poor in Texas.

Paul Horvitz

Houston

Texas's success in leading California—and every state in the union—in job growth stems from what I call "cowboy capitalism." This brand of capitalism does not refer to an unfettered, lawless economy run amok and out of control, but rather is a free market-oriented system based on individual liberty and limited government as envisioned by our nation's founders. Rugged Texas individualism has always stressed personal freedom and responsibility, and a general opposition to government control to attain social and economic objectives.

Even so, each state can only do so much. As I meet with financial institution leaders in the Eleventh Federal Reserve District (Texas, northern Louisiana and southern New Mexico) to discuss local economic conditions and ideas to promote growth, one concern remains paramount: uncertainty. Bankers tell us that there continues to be a negative impact on consumer spending and business investment decisions as a result of uncertainties emanating primarily from Washington.

Excessive uncertainty is the greatest enemy of economic growth. Yet great clouds of political, regulatory and economic uncertainty persist. Policy makers in Washington need to provide clarity to consumers and businesses on a credible plan to control the national debt, rein in the path of unsustainable federal government spending and reduce regulatory burdens (particularly for smaller community depository financial institutions). These actions will remove shackles, promote long-term planning and free economic actors to make wise and prudent decisions. An economic model with less government intervention and interference (aka Texas's cowboy capitalism) will outperform a heavy-handed model and create more jobs and opportunities, and stronger economic growth.

Thomas F. Siems

Senior Economist

Federal Reserve

Bank of Dallas

Dallas