You Decide: Should North Carolina Follow California or Texas?

You Decide: Should North Carolina Follow California or Texas?

NC State University – CALS News


May 21, 2021

California is a high-tax state with an activist government. Texas is the opposite, maintaining lower levels of taxing and government spending. Yet, if California and Texas were sovereign nations, they’d have the world’s 5th and 9th largest economies, respectively. What can North Carolina, which shares industry segments and economic advantages with both states, learn from those states’ divergent economic development models? “The different economies of the two states mean different workforces,” explains Mike Walden, Distinguished Professor Emeritus at NC State University. “Income inequality in the state is very high, with California ranking 4th among states in the unequal distribution of income,” Walden writes. “Texas, meanwhile, has an income distribution that provides relatively more middle-income jobs than California, but also relatively more lower income jobs and fewer higher income jobs.” In terms of fiscal policy, North Carolina and Texas share more commonalities. There are two key questions for North Carolina: where do we go from here and which policies will take us there?

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