Saturday, July 21, 2012

Unintended Consequences

There are two things liberals desire (well, more than two, but...). One is to create a highly taxed, highly regulated state, and the other is to eliminate as far as possible the gap between rich and poor. What they often don't seem to understand, though, is that these two goals are mutually exclusive. An anecdote in the August/September issue of First Things (subscription only) illustrates why.

The piece notes that in California, the most highly taxed, highly regulated state in the union, the middle class is fleeing. Wealthy individuals and large businesses can absorb higher taxes and regulations, and big corporations, in fact, sometimes welcome them because they tend to drive out the competition, which is exactly what's happening in California.

The taxes and regs are forcing mid-level businesses out of the state and with them are going many of their middle class workers. This leaves behind two groups: the wealthy who can still afford to live there and the poor who can't afford to leave even if they wanted to. From 2000 to 2009 1.5 million more people left the state than have entered it. They're heading for states like Utah and Texas where they can find jobs and afford to buy a house. This makes California a far more class-divided society than the national average, and the gap is continuing to widen as the middle class continues to flee.

None of this seems to matter to the liberals who have a hammerlock on California politics, however. They're convinced that taxes and regulations on business are good things. That they're in fact counterproductive to, and incompatible with, the classless society for which they yearn simply eludes their comprehension.

What will happen ten or twenty years from now if there's scarcely any middle class left in the state? In order to support all of their manifold social programs California will need to raise more revenue, and the only place they'll be able to get it is from the wealthy and big corporations. Eventually, taxes will rise to the point where these, too, will be driven away, and then all that'll be left of the Golden State will be a blighted ghetto where teeming masses of poor live in third world squalor.

At some point Californians will have to realize that taking from the rich to give to the poor really helps no one in the long run and just winds up hurting everyone.