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Top Foreign Investment States: South Carolina, Texas, North Carolina



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Boy, look at how workers in those right-to-work states suffer . . .

South Carolina takes top spot for jobs linked to foreign investment

IBM-Plant Location International report ranks S.C. above Texas and North Carolina

COLUMBIA, S.C. – South Carolina continues to stand out as a top destination for foreign investment, ranking first in attracting jobs through foreign investment, according to an analysis by IBM-Plant Location International (IBM-PLI). The Palmetto State ranked above Texas and North Carolina, which were ranked second and third, respectively, in the 2012 report.

“It is exciting to see South Carolina once again recognized as the ‘it’ place for business investment. Foreign firms have played and continue to play a key role in our state’s economy. We have worked hard to show companies from around the globe that South Carolina is the place to put down roots and do business, and this ranking is another indication of our success,” said Gov. Nikki Haley.

Each year, IBM-PLI publishes a report titled Global Location Trends looking at foreign investment around the globe. The data are derived from IBM’s Global Investment Locations Database (GILD) which tracks announcements by companies on their location decisions throughout the year. The numbers in the new report were based on data gathered in 2011.

“South Carolina is just right for business, and plenty of international companies know it. Hundreds of foreign firms employ tens of thousands of residents throughout our state, creating wealth and helping make the communities they’re in sustainable. The IBM-PLI report’s ranking is another confirmation that people are sitting up and taking notice of the economic development successes we’ve had here in the Palmetto State,” said Secretary of Commerce Bobby Hitt.

The report also looked at global trends and events that affect investment by companies. The latest edition of the Global Location Trends report can be downloaded from IBM’s website at www.ibm.com/gbs/pli.

South Carolina governor Nikki Haley’s office is showcasing that report . . .

Tags: Right to Work , States

Governor Cuomo Backslides



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New York’s fiscal situation is so dire that Gov. Andrew Cuomo was doing a pretty good Rick Perry impersonation there for a bit: cutting spending and generally behaving like a fiscal adult. Deroy Murdock voiced the pleasant surprise shared by many conservatives: “Cuomo’s performance thus far has advanced the cause of limited government in the Empire State far more than did his past three predecessors — the hapless David Paterson, the pantsless Elliot Spitzer, and the clueless Republican, George Elmer Pataki.”

Unhappily, that golden hour was not destined to last. Governor Cuomo is under pressure from union goons and other progressive groups, and probably from his own hereditary inclinations, to make the New York State tax code more “progressive,” meaning more redistributive and therefore more amenable to political manipulation. Rather than the current system, which applies a single rate to all taxable income — an arrangement that puts all taxpayers on the same side of the fight — the Left wants a graduated, class-warfare income tax. Putting taxpayers at odds with one another, rather than at odds with the tax-consumers, is a necessary step in the progressive divide-and-conquer campaign. And Governor Cuomo is obliging.

The deal being hammered out in Albany right now will be presented as an across-the-board tax cut for everybody in the state. And, technically, that’s true. The sneaky part is that the highest income group is currently paying a surcharge on top of the regular state income tax, and that surcharge was due to expire. Under the nascent deal, the top bracket will pay a lower effective tax rate than it is paying today, but not as low a rate as it would have had the surcharge simply expired. Basically, the surcharge has been reduced but made permanent.

As Capital Tonight puts it:

An overhaul of the state’s tax code will likely see five different brackets that will generate $1.9 billion in revenue for New York, a source with knowledge of the plan said.

The brackets under consideration are $40,000 and lower; $40,000 to $150,000; $150,000 to $300,000; $300,000 to $2 million and $2 million and higher.

There would be no change for those making less than $40,000, while the rate for those making $2 million and higher will decrease from 8.97 percent to 8.82 percent.

Those high earners would actually be in store for a larger cut if a surcharge is allowed to expire at the end of the month, but pushing this plan through now would allow lawmakers and Gov. Andrew Cuomo to claim they are slashing taxes for nearly everyone.

So, that’s a $2 billion tax increase, roughly, over current law — about half of what the progressives wanted.

Tax increases are not a categorical evil: Budgets have to be balanced, and spending has to be paid for. If you’re going to buy yourself an aircraft carrier, a highway, or a splendid little war in the Congo, you’re going to collect taxes to pay for it. What’s bothersome to me in this story isn’t the tax increase per se: It is first and foremost the revision of the tax code in a destructive way, and, secondarily, the fact that the additional revenue is going to be used not for essential and necessary services but for such Democrat-enrichment schemes as a stimulus-spending campaign and, as the New York Times puts it, “new programs to train poor urban youths,” i.e., using the unemployed to employ the unemployable through employment programs employing those who administer employment programs for the unemployed who are going to stay unemployed.

But long after the fiscal damage is done and the fruitless (at best) spending has been forgotten, the graduated tax system will remain as a cudgel in the hands of the political class.

Why should New York State have graduated income-tax brackets? Why should the country, for that matter? Here’s what Governor Cuomo has to say: “In New York under the permanent tax code, an individual making a taxable income of only $20,000 pays the same marginal tax rate as an individual making $20 million. It’s just not fair.” If Governor Cuomo were taking my writing course, I’d knock ten points off for question-begging. Why is a single rate inherently unfair?

A single rate is not only progressive, it is perfectly progressive: One’s income-tax liability is perfectly proportional to one’s income: At 10 percent, that means $10 on $100 in income, and $10 million on $100 million in income. Income taxes progress proportionally to income. What would be onerous would be a capitation tax, meaning that if government spending averages $25,000 per capita, then everybody owes $25,000 in taxes, regardless of income. (There is, in my view, an excellent moral case for precisely that kind of tax, but that’s an argument for another day.) Under a flat tax, if my income is 20 times yours, my tax liability is 20 times yours. I do not see how that is unfair, or why a tax liability 25 or 50 times as large would be more fair, or why the definition of “fair” necessitates that one’s tax liability be disproportionately increased relative to one’s income. Governor Cuomo has not made that case, probably because nobody ever has challenged him to do so. The “fairness” of graduated tax rates is just part of the intellectual weather, something that progressives present as though it required no argumentation or explanation. Conservatives should take the opportunity to force them to make the case — they’ll still get away with the robbery, of course, but maybe not the glibness.

Governor Cuomo deserves the thanks of his constituents for the good work he did in his first months in office, and he deserves the thanks of the nation for demonstrating the life expectancy of fiscal rectitude among Democratic governors: about the same the life expectancy of a robin, and there’s a long winter ahead before New York can expect to see another one of those.

—  Kevin D. Williamson is a deputy managing editor of National Review and author of The Politically Incorrect Guide to Socialism, published by Regnery. You can buy an autographed copy through National Review Online here.

Tags: Fiscal Armageddon , General Shenanigans , States , Taxes

Texas Scandalizes Liberals



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Today’s breaking news: Texas took stimulus money. Yeah, I know — breaking news from eons ago. The Left is currently engaged in a fairly transparent campaign to discredit governor Rick Perry and the Texas model of limited, pay-as-you-go government, largely because Democrats cannot abide the idea of a state with a strong economy and no income tax. Former economist Paul Krugman is leading that particular chorus, and the recent nattering from the likes of Jon Chait and Kos over the state’s accepting federal stimulus funds is silly. It is also a rather naked attempt to defuse the continued disgust with Democrats inspired by that particularly spectacular pork-a-thon: “See! See! Republicans took the money, too!”

If Rick Perry had had his way, there would have been no stimulus bill of the sort we saw and will be paying for (for a long, long time). Yes, that would have made balancing Texas’s budget more difficult — to the tune of $6.6 billion in a state with a $1.2 trillion economy. Shock, horror, etc. Texas had more than enough money in its reserves to cover that sum. Perry could have gutted those reserves to make a political point, but he chose not to. That is prudence, not grandstanding. It does not make the stimulus any less of a national shame.

Republicans lost the stimulus fight but are under no special obligation to leave money sitting on the table when Uncle puts it out there, which Texas did rather than tap the billions in its rainy-day fund. If I had my way, there would be no Social Security or federal highway system, but I’ll drive on the interstates, anyway: They’re there, and I pay for them, and I am under no obligation to deny myself the use of the things Joe Government funds out of the money extorted from me. If Texas could have negotiated a deal whereby it neither received stimulus payments nor saw its citizens put on the hook for funding them, I suspect Texas might have taken that deal — just as I would  opt out of Social Security today (yesterday!) if I had a choice. But to treat it as a scandal that a state is accepting some of the money being appropriated from its residents is boneheaded.

Texas’s government revenue is running about $15 billion less than expected this time around. So, what is the state doing? Senate Republicans have just submitted a bill that will — radical idea! — limit spending to the available revenue. AP:

The Senate bill calls for $73.8 billion in expenditures, exactly what the state comptroller said Texas will earn in revenues over the next two years.

The state agencies and the bureaucrats’ lobby want about $100 billion. They are not going to get it. That’s what legislatures are for — not that you’d know from the way our national one operates.

Chait and Krugman cannot abide by Texas’s “Just Say No” model of appropriations, because they are ideologically beholden to the belief that people cannot thrive without a very robust and paternalistic state to mind them. But they can, and do — and, once the bond markets get done with Washington, they will, nationally.

—  Kevin D. Williamson is a deputy managing editor of National Review and author of The Politically Incorrect Guide to Socialism, just published by Regnery. You can buy an autographed copy through National Review Online here.

Tags: Balanced Budgets , Debt , Deficits , Despair , Paul Krugman , States

‘I’m Shocked’



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Governor-elect Moonbeam is finding out that things are even worse than he thought:

Gov.-elect Jerry Brown said Tuesday that he wants to complete a budget agreement within two months of unveiling his budget, an accelerated timeline that would allow a late-spring special election for potential tax increases or other revenue generation.

… “We’ll present a budget on Jan. 10. It will be a very tough budget, but it will be transparent,” he said. “We’ll lay it out as best I can. We’ve been living in fantasy land. It is much worse than I thought. I’m shocked.”

What does it take to shock Jerry Brown, I wonder?

The state faces a $28-billion budget gap for the next 18 months, and roughly $20-billion deficits annually through the 2015-16 fiscal year. Non-university education accounts for roughly 40% of state spending, so cuts tend to significantly affect the state schools.

The nonpartisan Legislative Analyst’s Office has forecast that the K-12 school system and community colleges will receive $47.5 billion in the upcoming fiscal year, $9 billion less than four years earlier. In the past, state leaders relied on one-time gimmicks, some of which made the state’s deficit worse, and one-time cash infusions to patch over flawed spending plans. Those days are over, Brown said.

Brown says there are more cuts coming. “No there aren’t!” respond the unions:

Educators responded by calling for an end to cuts, asking for greater discretion at the local level as to how dwindling dollars are spent, urging the state to seek more federal funding and requesting legislation that would allow them to increase local property taxes with 55% of the vote rather than the current requirement of two-thirds.

The fact is that California could max out its tax rates and probably still not get out of the hole it is in — and a lot of states and municipalities are in the same condition. Which is why we need to push for action — action right now — on the Nunes-Ryan-Issa bill banning bailouts of state pension systems. That would be a good HR1 for the incoming Republican majority. The fiscal collapses in the states are an avalanche headed toward Capitol Hill, and is has to be headed out before the unthinkable becomes the inevitable.

Tags: Debt , Deficits , Despair , Fiscal Armageddon , Moonbeam Economics , States

New York: ‘Impossible’ Budget Cuts Now Possible



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The story of budgetary politics: The necessary is the impossible, until it isn’t — then the impossible is the only alternative.

In the case of the state of New York, the impossible is the billions of dollars in spending cuts that Carl Paladino wants to make in the state,  which, among other excesses, spends 40 percent more per government-school student than the national average. Can the impossible be done? Governor Paterson has some unusually insightful words:

“Everybody talks about what they’re going to do when they get into the executive branch, then when they get there the Legislature shuts them down,” said Governor David Paterson, 56, a Democrat and 20-year senator who isn’t on the Nov. 2 ballot.

In politics, the impossible is what you do when the money runs out.

Tags: Debt , Deficits , Fiscal Armageddon , Politics , States

WaPo Offers Clueless Account of States’ Budget Crises



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Michael A. Fletcher of the Washington Post deserves some sort of prize for D.C. conventional-wisdom regurgitation for his piece on the states’ budget crises. Check out this lead:

State governments desperately need money. Congress is in no mood to spend it. And the reckoning will begin Thursday, when the new fiscal year will start for most states.

Nothing less than the nation’s nascent economic recovery hangs in the balance. States say that if they do not find financial rescue they will have to cut services and workers. That would deliver a potentially crippling blow to the economy, which needs higher employment levels to fatten wallets, promote spending, bolster tax revenue and reduce dependence on expensive social services.

The paradox of spending ourselves out of a budget crisis is beyond the powers of the best and the brightest at the Washington Post. Later in the piece, he writes:

… with the emergency federal money drying up, states are being forced to make draconian cuts that economists warn undermine the stimulus effort.

Which economists would those be? The 73 percent of economists who think the stimulus accomplished approximately zilch?

And what about those “expensive social services” programs? You know what the most expensive social-service program is? A government job. The wage premium for government employees is enormous, especially when one considers the pensions and other benefits attached to those inflated salaries. The states are running out of money in no small part because they are running out of well-off people to steal from, and because they are spending faster than they can steal. And I use the word “steal” advisedly: What’s going on with state employees, who are using their political muscle to capture economic benefits far beyond anything they could win in a competitive marketplace, is theft. If a bunch of them lose their jobs, that’s not an economic crisis: It’s a first step toward rationalizing our economy.

Question for Mr. Fletcher: Where exactly would that state-aid money come from? Taxpayers on Mars? Lawmakers, he writes, “are reluctant to raise taxes, particularly as the economies in so many states are listing, leaving governors little option but to make deep cuts.” But some taxpayer somewhere has to put up the money for that aid. So if we’re going to bail out a spendthrift state like Maryland, we have a choice: Tax Marylanders to fund their state’s uncontrolled spending, or tax non-Marylanders to fund their state’s uncontrolled spending. What exactly is the case for punishing more responsible states to subsidize less responsible states? Either way, federal tax dollars don’t get miracled into existence any more than state tax dollars do.

Or we can borrow, taxing future taxpayers to underwrite present stupidity. But our ability to borrow has its limits, even at the federal level. You do not want to discover those limits the hard way.

Nowhere in the piece does Fletcher even briefly consider the possibility that states are spending too much money, and that their spending less money would be a good thing for the economy and for the country. Every source he talks to is either a member of a liberal advocacy group or somebody who makes his living spending taxpayers’ money (to the extent that one can distinguish between those two categories). It’s pretty shoddy journalism, and it reveals an underlying assumption: Every time a possible spending cut is mentioned, it is presented as a tragedy and as something that will harm the overall economy, even though lots of government spending produces zero economic value, or marginal economic value: Random example, one of many thousands, here.

It would not have been too terribly difficult for a Washington Post reporter to find an economist with a different perspective on this issue, or an actual taxpayer who suspects that fruit-fly research in Paris is not an especially high-yield use of American tax dollars. These are not radical ideas. But, as Upton Sinclair put it, “It is difficult to get a man to understand something when his salary depends upon his not understanding it.”

Tags: Spending , States

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