NCPA - National Center for Policy Analysis


June 26, 2009

California, New Jersey and New York have been models of "progressive" policies that are supposed to create wealth: lots of government "investments," high tax rates on the rich, heavy unionization and a large government role in health care.  How has it worked out, asks the Wall Street Journal?

Government spending as economic stimulus:

  • California had the nation's third highest jobless rate in May (11.5 percent); New Jersey and New York had below average unemployment rates in May compared to the national average of 9.4 percent, but one reason is that so many discouraged workers have left those states.
  • From 1998-2007, which included two booms on Wall Street, New York and New Jersey ranked 36th and 31st in job creation.

Soak the rich:

  • The state-local income tax burden, according to the Tax Foundation, is the highest in the nation in New York, second highest in California and sixth in New Jersey.
  • New York City boasts the highest business tax rate, 17.6 percent, according to a study by the American Legislative Exchange Council.

Deficit spending:

  • California's deficit for 2010 is projected at $33.9 billion, New Jersey's $7 billion and New York's $17.9 billion, despite multiple tax increases this decade.
  • The Manhattan Institute finds that three-quarters of the loss in revenues this year in Albany is a result of reduced income tax payments by rich people even though the state keeps raising taxes on high earners.

Powerful unions:

  • The unionized share of the workforce is 20 percent in California, 19 percent in New Jersey and 27 percent in New York compared to 13 percent across the country.
  • All three are non-right-to-work states, have super-minimum wage requirements and provide among the nation's most generous public-employee pensions.

Government health care:

  • A 2008 study by the Pacific Research Institute ranked the states on the basis of government regulation of health care and found that New York is most regulated, while New Jersey ranks sixth and California seventh.
  • "New York," the report declares, "suffers from government health programs that are out of control, a grossly overregulated private insurance market and almost completely uncompetitive provider markets."

Source: Editorial, "The Albany-Trenton-Sacramento Disease; How three liberal states got into deep trouble with 'progressive' ideas," Wall Street Journal, June 26, 2009.

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