11/16/2019

Another California Tax Grab

When I was CEO of Cypress Semiconductor, I chose Round Rock, Texas, over San Jose, Calif., for Cypress’s second wafer-fabrication plant, and I chose to locate our third plant in Bloomington, Minn. Other CEOs made similar decisions. Silicon Valley barely has any silicon left; there are now zero state-of-the-art wafer-fabrication plants here. We had to move because government has made Silicon Valley uncompetitive for manufacturing.

Despite boasting the second-highest gasoline tax in the U.S., California’s roads are so potholed it actually pays to buy tire insurance. California power costs around 15.7 cents a kilowatt-hour, compared with 11.2 cents in Oregon and 9.7 cents in Washington state. But even those state-regulated windfall rates aren’t enough: Pacific Gas & Electric is about to go bankrupt again.

The affordability problem helped create California’s disproportionately high homeless population of 114,000, which the state subsidizes heavily but treats poorly. During a cold and rainy spell in December 2014, the city of San Jose flattened a 300-person homeless encampment and threw away many of the inhabitants’ belongings, including survival items such as tents, clothing and cooking utensils. If it had been done to a Third World village, it would have been labeled a human-rights violation.

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