I have written about perverse good heartedness in an earlier blog. The subject was how progressive income tax at the state level drives business away. We are now seeing this in the migration of businesses from New York, Illinois and California to Texas.
I would like to make one more very important point. Progressive income tax and other antibusiness regulations and obstructions drive away new business.
I have watched as an entire new industry, dairy and cheese, moved into California struggled for 15 years with environmental and agricultural regulations and then moved the billion-dollar operation to Texas.
I have also watched as dozens of new businesses in the Internet world, such as Google, have moved every possible part of their business out of California.
Old businesses take quite a while and sometimes require significant distortions in order to get out of the state. Pacific Bell had to sell itself to the Texas Telephone Company to get out of California. The same was true for Bank of America and Wells Fargo and Southern Pacific and other old established companies.
It is hard for old companies to migrate, but they do. It is easy for new companies that are growing to migrate and they sure as hell do.
This makes the perversity of graduated income tax and other obstacles to commerce even more onerous.