For people as well as institutions, choosing a role model can be risky business. What you emulate, you often become.
Georgia conservatives, for example, are touting Texas as a model that we in the Peach State ought to emulate in terms of economic development, tax policy, business law and other areas.
“Texas by far is the most business-friendly state,” state Attorney General Sam Olens said recently, noting the absence of an income tax in the Lone Star State. “They haven’t had a recession.”
“In order to improve, it is important to compare yourself with the best,” writes Kelly McCutchen, president of the conservative and politically influential Georgia Public Policy Foundation. “When it comes to job creation, Texas is the leader.”
“Georgia should embrace the Texas model of a pro-growth tax code, regulation that is entrepreneur- and small business-friendly, limited government and limited government spending, and a fair legal system,” McCutchen argues.
It’s a pretty story that they tell, but let’s take a little closer look at its details, shall we? And let’s begin with the mythology of Texas as some exemplar of free-market ideology, because that’s a whopper of truly Texan proportions.
As part of its industrial recruitment efforts, Texas state government extends roughly $19 billion a year in special business tax breaks, tax refunds and other subsidies to corporations. That is by far the most generous corporate-welfare program offered by any state in the country, according to an analysis by the New York Times. That’s three times the total offered by Michigan, the state with the second largest corporate-welfare program, and 13 times larger than Georgia’s total of $1.4 billion.
And what does all that generosity yield? For example, has it produced widespread prosperity for the people of Texas? No. In fact, according to the most recent federal data, the median household income for a family of four in Georgia is slightly higher than it is in Texas. Other comparisons are equally telling.
Georgia has the nation’s seventh highest rate of children living in poverty, a profound challenge that complicates other challenges from health care to education. The state recommended as our role model, Texas, ranks fourth in that sad category.
Georgia has the fifth highest percentage of people who are working for the federal minimum wage or less; the state with the highest percentage of extremely low wage workers is Texas.
According to Gallup data, Georgia has the sixth highest rate of residents who aren’t protected by health insurance; Texas has by far the highest rate. If you live in Texas, you and your family are almost 30 percent more likely to be uninsured than you are in Georgia.
And while Texas has a reputation as a low-tax state, that is particularly true for those earning a high income, and not true at all for the poor. In Texas, those who make less than $32,000 pay 11.5 percent of their income in state taxes, the sixth highest rate in the nation. That’s a tax rate more than three times as high as for the richest 1 percent in Texas.
So yes, if your vision of prosperity is an economy dominated by low-wage jobs that provide no benefits, an economy in which corporations are showered with tens of billions of dollars a year in government incentives while lower-income citizens are taxed at one of the highest rates in the country, Texas is indeed the model that Georgia ought to emulate.
But is that really as high as we’re willing to set our sights for Georgia and her people?