Golly WOW!?...........Might the United States Close Their State Borders?

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California taxes move people out

California taxes move people out
Walter Williams
Published: Wednesday, October 10th, 2012

Several prominent California cities have declared bankruptcy, including Vallejo, Stockton, Mammoth Lakes and San Bernardino. Others are on the precipice, and that includes Los Angeles, California’s largest city.

California’s 2012 budget deficit is expected to top $28 billion, and its state debt is $618 billion.

Democrats control Calif-ornia’s Legislature, and its governor, Jerry Brown, is a Democrat. California is home to some of America’s richest people and companies. It would then appear the liberals’ solution to deficit and debt would be easy. They need only to raise taxes on California’s rich to balance the budget and pay down the debt — or, as President Barack Obama would say, make the rich pay their fair share.

The downside to such a tax strategy is that people are already leaving California in great numbers.

According to a Manhattan Institute study, “The Great California Exodus: A Closer Look,” by Thomas Gray and Robert Scardamalia, roughly 225,000 residents leave California each year — and have done so for the past 10 years.

They take their money with them.

Using census and Internal Revenue Service data, Gray and Scardamalia estimate that California’s out-migration results in large shares of income going to other states, mostly to Nevada ($5.67 billion), Arizona ($4.96 billion), Texas ($4.07 billion) and Oregon ($3.85 billion).

That’s the problem.

California politicians can fleece people in 2012, but there’s no guarantee they can do the same in 2013 and later years; people can leave.

But given the widespread contempt for personal liberty and constitutional values in our nation today, there might be a way for California politicians to solve their fiscal mess.

They can simply stop wealthy people from leaving the state or, alternatively, like some Third World nations, set limits on the amount of assets a resident can take out of the state.

This would surely be within their jurisdiction and would not raise any constitutional issues, because it would serve a compelling state purpose. In other words, if California were to set up border controls to stop people, as East Germans did at Checkpoint Charlie, before they cross the state line, such action would be protected by the 10th Amendment.

The fact that many Californians have managed to get their assets out of the state complicates the issue.

Article 1, Section 8 of the United States Constitution authorizes Congress “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.”

This is known as the commerce clause. There’s no question that people who pull up stakes and leave California affect interstate commerce; California has less tax revenue, and recipient states have more.

What California Attorney General Kamala D. Harris might do is sue Nevada, Arizona, Texas and Oregon in the federal courts for enticing, through lower taxes and less onerous regulations, wealthy California taxpayers.

Were California to take such measures and have a modicum of success, one wonders how many Americans would be offended by such an encroachment on personal liberty.

After all, how would forcing an American to remain in a state differ in principle from forcing him to purchase health insurance?

Walter E. Williams is a professor of economics at George Mason University. He writes for Creators Syndicate and may be contacted at:

wwilliam@gmu.edu