By John Seiler

Despite a slight improvement in the unemployment level to a still horrific 9.8 percent in November, California remains a terrible place in which to do business. The Wall Street Journal yesterday reported on how other states are luring businesses out from behind the California Curtain to freedom.

It describes how Replico Corp. moved one-third of its employees from Gilroy to Reno, Nev. “‘California is not a business-friendly state,’ said [CEO Michael] Whitehead. Though the decision was ‘hard because of the employee impact,’ the staff who made the move appreciate Nevada’s lack of income tax, he said.”

For the middle class, California’s state income tax is a confiscatory 9.6 percent. That’s often forgotten in discussions of the state’s staggering 13.3 percent state income tax on “those who can afford to share more,” as Democrats like to call jobs and business creators (a/k/a “the filthy rich”).

Nevada, here they come

WSJ:

“Nevada is one of a growing number of states stationing full-time business recruiters in California, as the nation’s economy recovers and the competition for jobs heats up. Economic-development bureaus seek to attract business and jobs from wherever they can, but California has become a particularly attractive target lately thanks to the prospect of rising taxes and new regulations that other states think could make companies there easier to lure away—an idea disputed by California officials….

“Now, states that have traditionally staffed external business-development offices only overseas are adding manpower in the Golden State. It isn’t the only place under siege—Virginia’s Fairfax County, for example, has also opened an office in Boston to lure biotech firms—but many are zeroing in on California, betting that new policies going into effect there will begin to push more businesses and entrepreneurs out….

“Companies rarely relocate purely at a recruiter’s suggestion. But states are hoping to capture the attention of Silicon Valley venture capitalists as well as California’s large number of entrepreneurs and CEOs, and to make sure they are on the shortlist for any expansions or relocations. Arizona opened its first two domestic out-of-state offices in October—one near Los Angeles, the other in Silicon Valley. Tennessee in November posted an ad for a new government position looking for California businesses to poach. Nevada hired its own representatives in California two years ago.”

When the next recession hits, and I believe it will be this year, companies will have even more incentive to leave Taxifornia for states with lower costs of government, and where folks actually like business, instead of hate it as here.

After all, California’s supermajority Democrats believe, businesses are just gross polluters that rip off employees and customers and funnel massive profits to the super-rich, who splurge on yachts and mansions and should have their wealth confiscated to spend it on the pensions of our brave and wonderful government workers.

Is California sliding into the Pacific Ocean? Are there riots in the streets? Are Californians starving to death?

None of the above.

Then the solution to the state budget problem is simple: Just rinse and repeat the fiscal 2011-12 state budget, which ends June 30, for the following year’s budget, fiscal 2012-13, which begins July 1.

Gov. Jerry Brown’s budget proposal increases spending $6 billion, while imposing $7 billion in new taxes to pay for it. The Legislative Analyst says the real tax intake would be $4.8 billion.

Either way, why not just cancel the higher spending and the higher taxes Brown wants to pay for it? Just keep on chooglin’ with with the current budget.

Of course, then Brown couldn’t shift into Gov. Moonbeam Mode and push his “bold moves,” as Katy Grimes reported, on High-Speed Rail, alternative energy and water. He’d just be an accountant who could take a vacation.

But that’s what the state needs. We’ve had “bold moves” from too many governors who now are in retirement after they left the state broke.

The toll is seen in a state debt that, as tallied by Dan Walters. The debt now totals something like $1 trillion. He wrote, “Brown’s budget pegs the state’s pension debt at $45.2 billion and retiree health care at $59.9 billion, but independent estimates of the pension gap have ranged as high as a half-trillion dollars, depending on assumption of future investment earnings. In all, state and local governments may be a trillion dollars in debt, equal to half of California’s annual economic output.”

And here’s a final point: What if Silicon Valley, whose billionaires pay so much of the state tax bill, finally get sick of Taxifornia, and decamp for Reno — with no state income tax — keeping only their vacation beach houses in California?

Jan. 10, 2012