Home > Economics, Right-Wing Extremism > Perry’s “Texas Miracle”: Rob the Poor, Lavish the Rich

Perry’s “Texas Miracle”: Rob the Poor, Lavish the Rich

March 10th, 2014

To hear Perry and conservative-cheerleader NewsMax tell it, Perry’s Texas is a paradise for all. 37% percent of all new jobs in the U.S. have been created in Texas since 2009, and it’s all supposed to be because of low taxes and low regulation:

Texas Gov. Rick Perry tells Newsmax that he attributes the “Texas Miracle” — the Lone Star State’s relatively robust economy during the economic downturn — to a “light” tax burden and a favorable regulatory climate. …

[Perry states:] “The men and women in Texas know something now after a decade-plus of our governorship and our policies being implemented by a Republican House, Senate, lieutenant governor and speaker. We’ve kept our tax burden as light as we could and still delivered the services that the people of Texas desire, and we have a regulatory climate that is fair and predictable.I cannot tell you how important is predictability and stability in the regulatory climate.”

What’s not stated is that it’s also because of a lot of other stuff:

  • Oil and gas prices are high, which sucks for the nation, but benefits Texas’ economy
  • Texas has a high birth rate and migration rate, artificially raising job numbers
  • Texas made off like bandits from the Obama stimulus, with half of the job growth coming from education, health care, and government sectors
  • Texas used $6.4 billion in stimulus money to help balance the state budget, more than all but 2 other states

And since the stimulus money is running out, Texas is now facing huge budget shortfalls, which it plans to mitigate in part by slashing Medicare and education spending—in a state which already has rock-bottom health care and education stats.

Certainly, Texas is great for businesses and wealthy people—but is horrible for the majority of people in the state:

  • Texas shares with Mississippi the highest rate of minimum-wage workers in the U.S.
  • 26% of Texans have no health insurance, the highest rate in the country
  • Deregulation of health insurance has led to sky-high rates
  • Texas has the 4th-highest poverty rate of any state in the nation
  • Texas’ unemployment rate, at 8.2%, is higher than the national average
  • Texas has fewer adults with a high school diploma than any other state; is 43rd in the nation in graduation rates, and 45th on SAT scores

I guess that when Perry says that the people of Texas are getting all the services that they desire, he figures Texans don’t “desire” education or health care. Or, likely more accurately, none of the people Perry associates with are lacking in any such services.

But the kicker is in the tax rate, when all taxes are taken into account. The state has no income tax, but it does have a high sales tax, and overall, its tax rates are extraordinarily regressive. Here is Perry’s so-called “light” tax rate, compared with California’s:

Blog Taxes Texas California

The poorest 20% of Texans pay four times more of their income in taxes than do the wealthiest 1%. That’s pretty shocking.

California’s is pretty regressive because it has an even higher sales tax, but that is attenuated by the income taxes. There is no such balance in Texas, meaning that the state’s tax burden falls chiefly on the poorest people—who also get the crappiest education, the least health insurance, and the worst pay.

So the message is clear: if you want all the benefits of third-world cheap-labor exploitation but don’t want to leave the U.S., Texas is your destination!

What’s most scary: this is the model for what Perry and many other Republicans want to bring to the whole country.

Not that that’s a big surprise, or anything.

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  1. Troy
    March 12th, 2014 at 12:17 | #1

    Texas sucks as does the US in general!

    California’s still cool I guess but I think I can leave it again.

    Meanwhile in Japan:


    this chart:


    fascinates me so. Japan has finished with the baby boom (late 1940s) and its baby boom echo (early 1970s) and has hit its steady state now with only gradual demographic decline from here.

    But there’s more people leaving the workforce than entering it!

    Pretty crazy!

  2. Troy
    March 12th, 2014 at 14:54 | #2

    Japanese population by age (thousands):

    Age 0-9 10,679 Age 50-59 15,631
    Age 10-19 11,917 Age 60-69 18,451
    Age 20-29 13,320 Age 70-79 13,649
    Age 30-39 17,254 Age 80-89 7,412
    Age 40-49 17,673 Age 90-99 1,475

    So today’s 12M teenagers are taking over from 18.5M retiring seniors.

    And the next group (now age 0-9) is also going to be 2/3 the size of their respective retiring group.

    While I have no idea how Japan’s quadrillion yen national debt is going to be remonetized, I think Japan is going to do OK otherwise.

    The US’s demographic picture is quite different; with Gen Y now age 20 +/- 9 years, and the same size as the boomers who were born ~36 years earlier.

    Plus all our immigration has really added more mouths to feed.

    Japan’s going to have fewer mouths to feed. While this isn’t great news for the farming sector, with a cheaper yen regime maybe Japan can find new export markets for food, too.

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