We recently came across some simple charts from the Tax Foundation that simply and effectively illustrate why businesses are fleeing states like California by the 1,000s.
In the first chart, the Tax Foundation presents data from The Bureau of Economic Analysis to compare purchasing power of $100 depending which state you live in. Ironically, the map turned out to look eerily similar to recent electoral college maps of Presidential elections with the Democrat-leaning northeast and west coast areas getting less bang for their buck compared to the southeast and mid-west. Could it be that rather than voting their desires to cling to “guns and religion,” to quote President Obama, that Americans in the southeast and mid-west are actually voting to preserve a higher standard of life that doesn’t require them to spend $2mm on an 800 square foot apartment? But we digress.
Ironically, the second chart which illustrates tax rates by state looks very similar to the first. The highest taxed states (dark blue) are in the northeast and west coast with lower tax structures in the southeast and mid-west.
And finally a map of minimum wage by state. Note that this doesn’t reflect California’s recent minimum wage hike to $15 which will be phased in over the next 5 years. At the risk of sounding like a broken record we’ll spare you our additional commentary.
Could it be that these charts have something to do with the mass exodus of businesses from the State of California to more “friendly” locations like Texas and Nevada? As pointed out by the Dallas Business Journal, a study conducted by Joseph Vranich, a site selection consultant and president of Irvine, California-based Spectrum Location Solutions, found that roughly 9,000 California companies moved their headquarters or diverted projects to out-of-state locations in the last seven years due to the Golden State’s “hostile” business environment. As the DBJ points out, companies are fleeing California to escape escalating costs and regulations and states like Texas and Nevada with no income tax and high relative purchasing power are the key beneficiaries:
It’s typical for companies leaving California to experience operating cost savings of 20 up to 35 percent, Vranich said. He said in an email to the Dallas Business Journal that he considers the results of the seven-year, 378-page study “astonishing.” “I even wonder if some kind of ‘business migration history’ has been made.”
Companies continue to leave California because of rising costs and
concerns over the state’s “hostile” business environment, according to the study, which also names companies and provides details of business disinvestments in the state.
Here are some highlights of the study:
- Texas ranked as the top state to which businesses migrated, followed by: (2) Nevada, (3) Arizona, (4) Colorado, (5) Washington, (6) Oregon, (7) North Carolina, (8) Florida, (9) Georgia and (10) Virginia. Texas was the top destination for California companies each year during the seven-year study period.
- Los Angeles led the Top 15 California counties with the highest number of disinvestment events, followed by: (2) Orange, (3) Santa Clara, (4) San Francisco, (5) San Diego, (6) Alameda, (7) San Mateo, (8) Ventura, (9) Sacramento, (10) Riverside, (11) San Bernardino, (12) Contra Costa tied with Santa Barbara, (13) San Joaquin, (14) Stanislaus and (15) Sonoma.
Turns out you really do get what you vote for.
For those who would like to review the full study, which the author summarizes as “California’s Forty Year Legacy of Hostility to Business,” by Spectrum Location Solutions, it can be viewed below:
Reality is a little more complicated that this. The blue states like CA have the tax money they send to the feds redistributed to most of the red states. Without federal dollars pouring in for roads, military bases, contracts with local businesses, states like GA would be in deep trouble. Here in IL where I live we get 78c back from the feds for every dollar sent to Washington DC, and the states of the old Confederacy get $187 in return for every dollar they send in.
Despite the charts you show, Los Angeles has had the greatest job growth of any city in the US. There is a lot more going on than you show.
Some links to the actual data would be helpful to understand and verify the statement you made.
For instance, how much is paid in by California in relation to how much is received and who are the beneficiary States?
And how much has the job growth in LA in relation to the population growth (and the type and nature of the jobs as well)?
Just wanting to see the information to make my own conclusions instead of just accepting what are apparently (without supporting data) your own conclusions or a repeat of someone else’s as the correct ones. (Note that the article presents data from which conclusions can be drawn, your post does not)
Maybe you’re right or maybe you’re not but I would like to determine it for myself one way or another.
Maybe you could present an article in itself to make your points as the author of this one did?
I’ve seen that claim before, David, and it sounds soooo good to welfare statists, but I’ve never seen it backed up by figures. If you have the detailed figures and an explanation of exactly how it works, post it.
I doubt you can. You’re likely just repeating this story and have never seen the proof. Post it if you have it.
David Butler
Read for comprehension you fuckwad. The story is about California, not LA. But I’ll obliterate your false narrative with data for both.
California’s employment has grown by 6.6% over the last 8 years. The annual growth rate works out to about 0.7% per year. Yeah – that’s booming. And most of them are shit service jobs.
LA is far worse. Employment in LA has grown by an astounding 2.8% over the last 8 years. WOW!!!!
That’s right Davie Boy. LA has added a total of 131,000 jobs since 2007. That works out to about 16,000 per year. Does that constitute the greatest job growth of any city in the US?
You’re a liberal tool who doesn’t know his ass from a hole in the wall. And I’ll provide links to my data, unlike douchebag trolls like yourself.
http://data.bls.gov/timeseries/LASST060000000000005?data_tool=XGtable
http://data.bls.gov/timeseries/LAUDV063108400000005?data_tool=XGtable
One thing I like about California is there views on noncompetes. I understand that in very specific and very limited ways do noncompetes hold up in court. This, in my opinion, is what is killing many would-be entreprenuers in other states.
Viva California for making noncompetes a thing of the past.
David, what does Jerry Brown’s cock taste like?
“the states of the old Confederacy get $187 in return for every dollar they send in”. It was the opposite when we tried to get free of you Damned Yankees; looks like ya’ll liberals have really screwed yourselves several ways since 1865.
Greetings,
This is all fine but why the name calling? References can be pointed out without sounding like a spoiled millennial.
Live in DFW area. Travel along 190 (GWB tollway) and view all the new construction.
Californicates are moving here in hordes. Me no Likey.
Be careful, Californians move in and take over to make the place Californic the same way Muslims move in and take over to make the place Islamic.
Same as New York-ers do when they move to Florida….build all their Pizza-by-the Slice joints, New York Delis, drive like idiots always in a hurry while giving everyone in their way the finger, bitch about how bad the South is, go to Tropicana Field and cheer for the Yankees against the home team, and make sure to tell us Southerners in that nauseating, moronic accent how they did EVERYTHING “up north”. Who gives a fuck how you did it up north? Need to put a bounty on them…
We really should have built a fence/wall around Kalifornia 25 years ago! People are bailing out of there like rats on a sinking ship intending to recreate the same hell they just left wherever they go. Reminds of the “moderate muslims” currently invading the west.
Only be fair, they did that during the dustbowl/depression era to keep the Okies, Arkies and other dustbowl refugee migrants out.
Not to mention those awful NYers who moved to California in the 70s……(am one of them). All I heard from my native CA husband for years was ‘you NYers…. ruined everything in CA!’ Ah times change, but one thing never does, NY and CA love to tax their residents out of house and home.
Admin beats on David Butler like a rented mule. Heh. Can I play?
Of course states like California, New York, and Illinois send more tax money to the federal government than they “get back.” California has by far the most number of millionaires – 730,000 as of 2015 – than any other state. Billionaires? Yep, California wins again with New York a close second (all but one lives in the NYC metro area and they are all Wall Streeters).
And this metric doesn’t include the taxes from super wealthy corporations home-based in the deep blue states like your Illinois. Caterpillar, anyone? State Farm? Northern Trust? And on and on. Except for Texas and Virginia, states in the Old Confederacy like Mississippi and Alabama are poor because many of the residents are poor and pay little to no taxes. Duh. And they have very few heavy hitters in the corporate world. If it weren’t for oil and gas, Louisiana would be in deep shit.
Try taking your thinking to the next level before you spout off here, David.