Companies are fleeing California for Texas. The California Policy Center has compiled a list of companies leaving the Golden State for more business-friendly states. The California Book of Exoduses is a database in which they document the relocation of companies leaving California for states more conducive to economic activity.
Since 2005, 183 companies have left the state. The mass exodus started very recently: 165 companies, 90% of those counted by the California Policy Center, have left California since 2018, 32 left in 2022.
Nearly half migrate to Texas
Texas has been the largest beneficiary of this exodus, with 88 of the 183 companies leaving California migrating to the Lone Star State. Thirteen have gone to Florida, 10 to Tennessee, nine to Arizona, another nine to Colorado, and seven to North Carolina. Nevada, Virginia, and New York are also among the states that these companies consider more suitable for business development than California.
In addition to Texas being the most common new home for former Californian businesses, it has also welcomed the highest-revenue companies who chose to abandon the Golden State. Among the companies that have not withstood California's combination of taxes and regulation is CB Richard Ellis, with a 2021 revenue of $27.7 billion, and Hewlett Packard (HP), with nearly the same revenue.
Companies and individuals
Charles Schwab also chose Texas to be its new home for its business, which reported $18.5 billion in revenue last year. The same goes for Chevron, which last year grossed $162.4 billion. Oracle is another business that has moved to Texas. Its revenues exceeded $40 billion in 2021.
Companies aren't the only ones leaving, but also individuals who have a high earning capacity. This is the case of the man who was the richest in the world until recently: Elon Musk has moved to Texas, as well as Joe Rogan. Gene Simmons has moved to Nevada, Hillary Swank to Colorado, and Ben Shapiro to Florida.
Hollywood is no longer the hub it once was for rich movie actors. Taxes and regulations, housing costs, and safety encourage many to leave the state. Ozzy Osbourne left Los Angeles and returned to the UK because of the high crime rate. Beyond the flight of businesses and Hollywood actors, there is a growing trend of residents leaving the state.
Just the News, which has echoed the CPC's report, spoke to various businesspeople that have found Texas to be a favorable environment for their business. One was Brandon Buschold, president of Integrated Defense Products:
Texas is politically, by nature, an extremely business-friendly state. With a highly skilled workforce, ongoing trade programs, a reasonable cost of living, and a lower overall tax burden, IDP will be strategically positioned to build a stronger team while continuing its focus on new technologies.
California loses "tomorrow's giants"
Just the News cites a Tax Foundation report that Californians moving to Texas will pay about one-third less in taxes. In fact, according to the 2023 State Business Tax Climate Index prepared by the Tax Foundation, Texas ranks 13th lowest in the entire country in terms of the tax burden. It has moved up one place from 14th in the previous year. California stayed stagnant in 48th place, exactly where it already was in the 2022 report.
The authors of this report warned this trend will likely continue:
California is experiencing a serious loss of company headquarters to other states. The phenomenon, which includes business in nearly all industries, has gone virtually unrecognized by the state’s elected officials and governmental agencies. Unless policy reforms reverse this course, California will continue to lose businesses, both large established businesses and young, rapidly growing businesses, some of which will become the transformational giants of tomorrow.