“Toyota Motor Corp. is moving substantial parts of its U.S. headquarters in Torrance, Calif., to suburban Dallas,” writes the Detroit News, “as the world’s largest automaker seeks savings from its U.S. sales unit, people familiar with the matter said.”
Although no figures are yet available, anecdotal evidence suggests that people are fleeing California, not just companies.
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SFGate.com says that 66% of all state revenue now comes from personal income taxes, and that the top 1% paid 41% of all personal income taxes in 2011, while half of all adult Californians paid no income tax at all.
And that was before Proposition 30 passed, a measure that raised the top income tax rate in California to 13.3%, the highest in the nation.
That plays into part of the corporate moves. Imagine being able to give employees a pay increase between 8% and 13.3% by moving from California, to say, Texas.
Not coincidentally, Texas Gov. Rick Perry has spent a great deal of time advertising to Golden Staters the benefits of moving to Texas. Similarly, Indiana and Wisconsin have taken pains to try to recruit corporate relocation from high tax jurisdictions like neighboring Illinois.
Imagine how much happier Toyota salespeople will be, who after all, get paid more money if they sell more cars and now will be able to keep more.
Show me a unionized employee who got a pay increase of 8%-13.3% this past year.
To add to the injury of a tax increase, California also made the tax increase retroactive, which raises a whole bunch of constitutional concerns.
AdverseEvents founder Brian Overstreet told CBN News that he “has suddenly found himself owing an extra $250,000 because of this sudden move by the state to impose back taxes for the past five years.”
Ironically, California is sitting on one of the largest oil finds, with an estimated 400 billion barrels of oil, or about half of Saudi Arabia's conventional reserves. But instead of tapping that economic potential, the state is taking the lazy man's route out by making the millionaires pay.
So oil companies are leaving California in droves, as our colleague Erika Johnsen at HotAir pointed out in March.
Destination? You guessed it: Texas.
Four of the top six states in GDP growth between 2008 and 2012 are high-energy states. North Dakota, Texas, Alaska and Louisiana posted GDP growth between 8% and 35% in the five years through 2012.
Even Hollywood is fleeing the Golden State.
Despite attempts by California to use the millionaire tax to produce subsidies in order to keep film production on the West Coast, states and countries that are hungrier for the jobs films produce, temporary though they may be, are outbidding them, notes Variety, the bible for all things Hollywood.
California currently pays a 20% subsidy for production costs. Australia pays 30% subsidy for production costs.
While the correct subsidy number should be 0% to offset production costs, California's political reaction to this Hollywood holocaust is predictably foolish.
“Steve Dayan, who serves as vice chairman of the state film commission and secretary-treasurer of Local 399 of the Intl. Brotherhood of Teamsters,” writes Variety, “spoke at the Feb. 22 labor rally, promising his union would be willing to repeat its 1999 action of encircling the State Capitol in Sacramento with 200 Teamster trucks — a tactic used to campaign for incentives. ‘We are not going to let other states poach our jobs,’ he said, evoking loud applause from the 700-plus attendees.”
Yeah, keep fighting the last war.
Presumably, Dayan believes that they can just raise taxes on millionaires even higher or, better yet, Toyota Motor Corp. to subsidize the jobs that California can't compete for on the open market.
In other words, expect the exodus from California to continue.