Tuesday, February 12, 2013

Businesses Fleeing California

When it comes to companies leaving California it's no longer a matter of if, or even when, but where
The firms interested in making the move include software, tech, aerospace defense, engine technology, and life-science companies—in other words, the industries (apart from Hollywood and agriculture) that made California rich.

The motivating factor in these cases isn’t so much that cities like Fort Worth and Phoenix have suddenly found the perfect formula for luring away coastal business elites. Rather, it’s that California’s business climate is so toxic that regions hitherto considered commercial backwaters now seem perfectly acceptable, if not preferable. (As far as we know there’s no rush for Vermont CEOs to relocate to Arizona, after all.)

California’s severe tax and regulatory system is the result of decades of legislation, but November’s Proposition 30 continues to look like the straw that broke the CEOs’ backs. The unintended consequences of that tax increase continue to be a bane to California and a boon to its neighbors.


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