A recent report from the Hoover Institution highlighted the ongoing migration of companies moving their headquarters out of California to escape the Golden State’s high taxes and regulations.
According to the report, which was released on Oct. 25, the business capital of California in 2021 left the state twice in 2020 and 2019 and three times in 2018.
Over the past three years, California has lost 11 Fortune 1,000 companies, whose exits are expected to disrupt the state’s economy.
The authors say that the transition from growth comes to economics, “plain and simple,” noting that government and local policies have raised business costs that are not feasible. As a result, businesses are choosing to relocate their capital to areas with favorable climates such as lower taxes and lower costs of living.
The migration, according to the report, is taking place in many industries, including manufacturing, aviation, financial services, real estate, pharmaceuticals, health care, and luxury goods.
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Major technology companies such as Hewlett-Packard Enterprises, Oracle, and Tesla lead the most media attention when they leave California. But the state, the report says, is also losing small businesses, which is putting a strain on California’s economy.
Texas remains a destination for businesses leaving California. But businesses are also moving to other states with lower business costs and better business climates than California, according to reports.
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“Legislation has made the cost of business and housing so high that companies and people are moving out of the government to cheaper, less regulated and taxing areas,” said the report. “This work will continue until the political leaders in the state make a radical decision that creates a different future for California – one that respects its past.”