|Businesses Flee California
By Michael Reagan
It never occurred to me that one could do exchange rate calculations between U.S. states. I always thought exchange rates only applied to foreign countries.
For example: Does the 20-to-1 exchange rate for pesos and dollars make up for the risk of decapitation on a visit to Mexico? Or should I settle for the much lower 1.32-to-1 exchange rate for Canadian dollars to U.S. dollars and have a better chance of surviving my vacation?
The Tax Foundation has estimated the difference in purchasing power for a $100 bill in various states. The winner of the competition was Alabama where you get $115.34 in value for your Benjamin.
Right next door to my home state of California, my former home state (went to high school there) of Arizona nets you $103.73 for your hundred smackers.
While in California your $100 is worth $88.97. Only in New York, New Jersey and of course Washington, D.C. could you get less for your money.
Is it any wonder Spectrum Location Solutions found 9,000 businesses left California between 2008 and 2015 in search of pastures where their greenbacks had more impact.
Joseph Vranich, president of SLS, told the Dallas Business Journal “companies are leaving California to escape escalating costs and regulations can move to Texas or Nevada that have no income tax and high relative purchasing power. I even wonder if some kind of ‘business migration history’ has been made.”
In the same interview Varnish estimated that California escapees have enjoyed “astonishing” operating cost savings from 20 to 35 percent.
That’s what happens when nanny state government decides to put the golden goose on an Ex-Lax diet to pay for its “compassionate” big government.
Some states claim to be “open for business” while California has “opened up on business.”
The top ten states that have enjoyed to California’s government-induced business exodus are Texas at the top followed by Nevada, Arizona, Colorado, Washington, Oregon, North Carolina, Florida, Georgia and Virginia.
The California counties that have suffered the largest loss of businesses are just the ones you would expect: Los Angeles, Orange, Santa Clara, San Francisco, San Diego, Alameda, San Mateo, Ventura, Sacramento and Riverside.
Proving that after a while business realizes California may have good weather, but you can’t take a climate to the bank.
Breitbart observed, “The Tax Foundation established a direct inverse correlation between purchasing power and the percentage level of state tax rate. California, with a 13.3 percent top state tax bracket, leads the nation.”
A dubious distinction that costs the remaining residents in lost employment opportunities.
Michael Reagan is the son of former President Ronald Reagan and chairman of the League of American Voters. His blog appears on reaganreports.com