Yes that is possible, but I’m doubtful. Here in Cali most of the prime orange growing land is being turned into homes, condos, apartment buildings and strip malls. At least that is my impression evertime I drive through Orange county. Yeah, anecdotal evidence, but there is a reaason Orange county is called Orange county.

Another possibility would be that oranges (or whatever) might not be fungible–there may be some difference between California oranges and Florida oranges. People in California might prefer the taste of orange varieties that don’t grow well in their state, but do grow well in Florida; people in Florida might prefer the taste of oranges that grow better in California.

You might want to look up the theory of comparative advantage, I think it’ll answer your question. Here are three explanations that I found, but there are others as well that say the same thing:

http://www.answers.com/topic/comparative-advantage

http://www.econlib.org/library/Topics/Details/comparativeadvantage.html

http://www.netmba.com/econ/micro/comparative-advantage/

I doubt you are seeing oranges from say Florida being shipped to California and California Oranges being shipped to Florida. To ship from one state to the other it seems to me that both have to be true.

CA: P(FL) – P(CA) > T(FL)
FL: P(CA) – P(FL) > T(CA)

P(FL) = Price of oranges in FL, T(FL) = Transportation cost to Florida. Similarly for P(CA) and T(CA). Now, if we make the simplifying assumption that T(FL) = T(CA) = T then the above reduces to,

P(FL) > P(CA) + T for the CA orange grower.
P(CA) > P(FL) + T for the Florida grower.

Now do you see the problem? The above implies the following,

P(CA) > P(FL) + T > P(CA) + 2T or

P(CA) > P(CA) + 2T.

This is only possible if T < 0 which seems downright silly save for the possibility of transportation subsidies–i.e. you get paid money to transport oranges.

I went to the store here in North Carolina to get a watermelon, and all they had were California watermelons, so I asked the clerk if I could get a watermelon from NC, he informed me that I could not, because they had all been shipped to CA

Hmmm…humorous, but I don’t believe it.

Their problem is that they are trying to do too much, not that their citizens are not productive enough to pay taxes.

Well, but taxes and productive are most likely related. Increase taxes and people will be less productive. People determine how much work they do (i.e. how productive they are going to be for a given level of education and ability) based on the after-tax return on that level of work. Increase the tax rate and the after-tax return will decline resulting in a decrease in work effort…at least in theory.

Similarly for investments in say education. I’m going to invest in education up to the point where the marginal unit of education is equal the the marginal benefit which will likely include the interest rate. Since people care about the after tax return and interest income is taxed we’d have to look at the after-tax rate of interest here. The higher the tax rate the lower the after-tax interest rate and hence lower education. Now the latter can be partially offset by lowering the cost of education via subsidies, but that also increases you tax requirement and hence your tax rate assuming a balanced budget requirement, which a state like California has.

And this is just for individuals and the decisions they make. When we look at corporations the higher the corporate tax rate the fewer firms you’ll have in any (competitive) market. They will either relocate or simply shut down. There are firms that are on the margin–i.e. those firms that are on point of either staying in the market or leaving. Raise the tax rate and those firms will most likely decide to shut down. Bill Clinton’s moronic comment to the pizza store owner to simply raise prices is not an option in a competitive market. Sure the price in the market will go up, but precisely because the corporate tax has forced those marginal firms out of business.

So this idea that it isn’t a tax shortfall ignores the connections between tax rates an the decisions made by market participants. This doesn’t mean that these states also don’t spend gobs of money.

I went to the store here in North Carolina to get a watermelon, and all they had were California watermelons, so I asked the clerk if I could get a watermelon from NC, he informed me that I could not, because they had all been shipped to CA.

Though, truth be told, I’ll happily trade the NYSE for the nuclear weapons programs at Los Alamos and Sandia.

If you look at the balance of payments, it’s all those red, “pro-business” states that are the big welfare queens and it’s we blue “anti-business” states that are paying the bills.

… fixed that for ya.

Since the five “red” states (New York, California, New Jersey, Michigan and Massachusetts) account for 26.5% of the US population, while Georgia, Tennessee and Florida account for 11.1%, we see that the public debt per resident is about 3 times as large in the group of five compared to the group of three.

To lower order, here are some GDP/capita figures: NY $57K, CA $50K, NJ $54, GA $41K, TN $40K.

Given these data, I wouldn’t attribute the public debt of NY, CA or NJ to a tax shortfall. Their problem is that they are trying to do too much, not that their citizens are not productive enough to pay taxes.