A recent report from the Hoover Institution showed an exodus of company headquarters from California to escape the state's high tax rate and regulations.
The report indicated business headquarters in 2021 left the Golden State at twice the rate in both 2020 and 2019, and at three times the rate in 2018.
California has lost 11 Fortune 1,000 companies over the past three years. These exits are anticipated to hurt the state's economy as innovative ideas are leaving with these unique businesses.
State and local policies have raised the costs for business to an unmanageable level. Now, companies are looking to relocate to areas with lower taxes, less regulation and lower living costs.
Many industries have been affected, including manufacturing, aerospace, financial services, real estate, chemicals, health care and high-technology businesses.
The tech hubs of Silicon Valley and San Francisco are among the most productive of places on the planet. Policymakers take these tech firms for granted, although Hewlett-Packard Enterprises, Oracle and Telsa had fled to Texas.
The state is not just losing Big Tech legacy firms but also smaller businesses that point toward California's economic future.
The Tax Foundation, a nonpartisan think tank focusing on state and federal tax policies, ranks California 49th in its Business Tax Climate Index.
Envirotech Vehicles, which created zero-emission trucks, heavy equipment and buses, left California for Arkansas. Demand for these vehicles is expected to explode as the U.S. moves toward replacing fossil fuel-powered vehicles.
According to the report, Texas is "by far" the destination for these businesses; and since 2015, California has seen an out-migration of 700,000 people.
Political leaders dismiss the exodus, pointing out that California remains the world's fifth-largest economy. The flocking of businesses is expected to continue until the state makes policy changes.
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