California, that so-called “wackadoodle” state as defined by Ohio Gov. John Kasich who enjoys mocking it for its progressive governance, policies and leaders, may now be the best state to do business in.
“The Tax Foundation says the state’s tax structure is the third worst for business in the U.S. Forbes ranks California’s business costs fifth highest among the 50 states and its regulatory environment the eighth most burdensome. Why then does the market, where buyers and sellers determine relative value, show otherwise? California-based companies surpass their competitors in the U.S. by most measures of performance favored by investors,” Matthew A. Winkler, a reporter at Bloomberg, wrote Thursday.
After a lifetime of advocating for low tax rates as a reward for investments and so-called “common-sense” government regulations that are supposed to attract business to the Buckeye State, Gov. Kasich is standing on the sidelines watching the Golden State eat Ohio’s lunch. And yet, after all his pavement pounding to lower tax rates, eliminate inheritance taxes, and generally make government a handmaiden to the private sector, Ohio is still among the ten lowest-ranked, or worst, states in the Tax Foundation’s 2015 index. California is ranked third worst at 48th, while Ohio follows closely at 44th. “The states in the bottom ten suffer from the same afflictions: complex, non-neutral taxes with comparatively high rates,” Tax Foundation report authors Scott Drenkard Joseph Henchman wrote.
As Mr. Winkler posits, “Maybe high taxes and strong regulations don’t daunt business leaders if well-spent and well-aimed.” He forecasts that “places that prepare for big 21st-century challenges such as urbanization, climate change and globalization are likely to be the most successful.” He adds, “California companies lead the U.S. in confronting these risks with superior results for shareholders and bondholders. The corporate performance coincides with growing confidence in the state under Governor Brown, now in his fourth term. That’s shown by the biggest four-year drop in the cost of state credit default swaps, a kind of insurance against bondholders’ losses and a way to speculate on creditworthiness.”
Maybe it’s Gov. Kasich who’s the real wackadoodle here, for freezing renewable energy standards that were among the best in the nation until he became the only governor to call a halt to them. When he catered to status quo energy special interests, he chilled out investors interested in clean, renewable energy investments. Maybe even more galling to Gov. Kasich is that, according to Bloomberg data, California continues to rank as the No. 1 state for manufacturing, producing $239 billion, or 12 percent of all manufacturing in the U.S.