My brother Phil has the cover article in the new issue of the Washington Monthly. He examines the so-called “Texas Miracle” and finds it to be mainly hype. For example, people are not fleeing high-regulation states for low-regulation Texas:

…despite all the gloating by Texas boosters about how the state attracts huge numbers of Americans fleeing California socialism, the numbers don’t bear out this narrative either. In 2012, 62,702 people moved from California to Texas, but 43,005 moved from Texas to California, for a net migration of just 19,697. That’s a population flow amounting to the movement of one village in a continental nation. Far from proving the merits of the so-called Texas model, it shows just how few Californians have seen fit to set out for the Lone Star State, despite California’s high cost of housing and other very real problems. The same is true for all but a handful of Americans living in other states. Net domestic migration to Texas peaked after Hurricane Katrina devastated Louisiana and Mississippi, and has been falling off ever since.

But, more importantly, Texas doesn’t actually have lower business taxes than most of the country.

Moving a business to Texas also turns out to have tax consequences that are inconsistent with the conservative narrative of the Texas Miracle. Yes, some businesses manage to strike lucrative tax breaks in Texas. As part of an industrial policy that dares not speak its name, the state government, for example, maintains the Texas Enterprise Fund (known to some as a slush fund and to others as a “deal-closing” fund), which the governor uses to lure favored businesses with special subsidies and incentives.

But most Texas businesses, especially small ones, don’t get such treatment. Instead, they face total effective tax rates that are, by bottom-line measures, greater than those in even the People’s Republic of California. For example, according to a joint study by the accounting firm Ernst & Young and the Council on State Taxation, in fiscal year 2012 state and local business taxes in California came to 4.5 percent of private-sector gross state product. This compares with a 4.8 percent average for all fifty states—and a rate of 5.2 percent in Texas. With the exception of New York, every major state in the country, including New Jersey, Massachusetts, Pennsylvania, Ohio, Michigan, Indiana, Illinois, Wisconsin, and Minnesota, has a lower total effective business tax rate than Texas. If you think that means Texas might not offer as much “liberty” as advertised, well, you’re right.

Texas Governor Rick Perry understandably wants to be a booster for his state, but the impressive job growth there is almost entirely explained by the petrochemical boom they have experienced over the last decade. And with every boom, comes a bust, as Texans know only too well.