After California Gubernatorial Debate, Differences Clear Between Candidates

governor showoffThe 2014 Governor’s race is already well underway in the state of California where Democratic incumbent Governor Jerry Brown is seeking reelection. He was first elected in 2010 when he ran against Hewlett-Packard CEO Meg Whitman. Neel Kashkari is the Republican challenger to Governor Brown. Kashkari is a former Treasury Secretary official who worked under the Bush and Obama administrations.

On September 5, the first and apparently only debate between the two candidates took place. The two candidates differed widely on a number of positions, leavings voters with a very clear understanding of what each candidate stands for and what makes the different.

Governor Brown predictably spoke on his signature project of building a bullet train from Los Angeles to San Francisco. This idea has brought on praise by some but also disdain by other who argue public rail projects are poor investments of taxpayer funds.

The recently passed legislation that imposes a statewide ban on all single-use plastic bags was discussed at the debate as well. Governor Brown stated that he would indeed sign that legislation while Kashkari disparaged it. This legislation, argued by some, would be a positive move to protecting the environment from the cruel harms of plastic bags that take up space in landfills and get animals caught up in. Others argue that it will raise the cost of basic activities like shopping for groceries for working families all across the state and is a distraction from more important issues.

The polling looks positive for Governor Brown, as he is polling at some of the highest rates of his tenure in office. Couple this with the fact that Kashkari still has very low name recognition. Only 1 out of every 4 voters recognizes his name, which is terribly low for this late into the campaign.

Governor Brown clearly realizes this fact as he is doing his best to run a low-risk, non-eventful campaign. Incumbents enjoy a large advantage over challenging opponents, one of which is name recognition, another in the case of Jerry Brown is his positive approval rating. He has no real incentive to do or say anything crazy in his campaign that could jeopardize an easy victory over a challenger that is having a difficult time getting his message out to the public. That is probably why Governor Brown gave an extremely vague response when he was asked what he planned to do to tackle rising pension costs in the Golden State.

Perhaps we can see the Governor be a bit more concrete as the we get closer to election day, but as for right now, he is keeping his cards close and playing it safe, which is not at all a bad strategy.

Kashkari on the other hand painted Brown as out of touch due to a 40-year career in government and made the claim that California is 45th in education and 1st in poverty, possibly showing that he would make an emphasis if he were elected to improve the educational system of California and get more jobs for middle-class workers.

Nevada hands out Biggest Tax Deal in History

tesla factory workersPeople are making a big deal about the latest Tesla deal to build a new gigafactory to build batteries for their electric cars. The factory will end up employing approximately 6,500 job, an absolutely huge number of jobs. But the problem is people are focusing on the wrong part of the deal and not looking at the elephant standing right in front of them.

Many people on the right are jumping at the opportunity to blame California’s high tax rates as the reason for Tesla picking Nevada over California. California, of course, has some of the highest income and business taxes in the country. Nevada on the other hand has no income tax and also has no corporate income tax. The comparison seems ripe for the picking, doesn’t it?

Well, not necessarily. Nevada made an unprecedented deal with Tesla to lure them into the state with $1 billion in tax incentives and other deals. This is the single largest tax incentive plan in the history of the state of Nevada. So the question that needs to be asked is if the high taxes of California are enough to drive businesses to other states like Nevada, then why did they give so many tax breaks to the company?

While it’s good to see good American manufacturing jobs being created again and it’s all the more better that it’s for electric car batteries, the government shouldn’t be cutting deals with corporations to do it. How many small mom and pop businesses out there could use a hand with their business right now, but have no such help from the government? Meanwhile, a gigantic company like Tesla is getting a multi-billion dollar tax break to locate a factory in the state.

A question that needs to be asked to any candidate is what roles to taxes play in economic development? Are higher taxes good or bad for job growth? Because both of the standard models that the left and right put forth more or less failed in this Tesla case. Tesla clearly chose the state with the lower taxes, i.e., Nevada both because of an overall lower tax rate and also massive tax incentives. This shows that the high tax rates in California seem to matter at least to some degree to the business, but at the same time, it obviously took the company much more than just the overall tax rate itself to locate in Nevada. If lower taxes alone were the determiner, then why wouldn’t they have chose Nevada over California regardless?

Getting a clear answer from politicians making these kinds of deals in government may be tough but it is absolutely essential when making an informed vote this election season. If it is the purpose of government to try and select large corporations to come in and make jobs for the citizens, what are we going to do for small business? Similarly, if governments aren’t going to do anything to bring in these businesses, what will they say to citizens when the companies choose states that will?