Despite a struggling oil and gas industry, Texas continues to experience economic growth because of low taxes and limited regulation, a Wall Street Journal editorial argued.
"Last week’s ‘beige book’ release from the Federal Reserve Bank of Dallas shows that despite the struggling oil and gas industry, the Texas economy is still enjoying moderate growth," according to WSJ. "Since prices in the oil patch began sliding a year ago, pundits on the political left have been waiting for evidence to declare the Texas model a failure. They’re still waiting."
What has helped Texas continue to grow is their free-market policies of eliminating personal and corporate income taxes and restricting red tape. "The Texas strategy of avoiding burdensome taxation and regulation has attracted a variety of businesses across many industries that have diversified the state economy," says WSJ. "Texas still has no personal or corporate income tax."
Because of these policies, Texas has seen their gross domestic product (GDP) and unemployment metrics improve.
"Last month the federal Bureau of Economic Analysis reported that in 2014 the Texas economy grew by a sizzling 5.2%, second fastest in the country after North Dakota’s 6.3% and more than twice the U.S. average," states WSJ. "Unemployment in the state, 4.3% in May, was still well below the national average of 5.5% that month."
Texas Republican Gov. Greg Abbott has recently cut taxes by $4 billion over two years and has been incentivizing business leaders to move to his state.
"New Gov. Greg Abbott has been annoying the left even more by taking a hatchet to business franchise and property levies," states WSJ. "He recently signed into law tax cuts amounting to $4 billion over two years despite the reduced flow of revenue due to falling oil production. This is the opposite of the tax-raising strategy pursued by Illinois, Connecticut, Maryland and New York when revenues decline. The Texas governor was in New York urging more businesses to consider moving south and west."
"Imagine how the economy of Washington, D.C., would suffer and how high the local unemployment rate would soar if government spending fell by half in less than a year," the article states. "But Texas is mainly in the business of wealth creation, not redistribution."