It’s a great thing that every business owner in America has the freedom to choose where to operate their business.  Some individuals choose to be close to their markets. Some people choose to be close to their raw materials. Some people choose to be close to their families.  The critical piece in this calculus is that the owners are free to choose one place over another, valuing the benefits of proximity to markets, raw materials, or families or whatever according to their own standards.

Particularly in the last ten years, two additional criteria have increasingly influenced where business owners choose to locate their business.  Those two additional criteria are the level of regulation governing a business enterprise and the level of taxation on the personal net income of the owner(s) of that business.  The prime impact of the application of these two new criteria is consistently showing up in reports of businesses and individuals departing the state of California for other locales.

Business owners know that it’s not what you make – it’s what you keep.  What an owner is required to pay in taxes makes a difference in where to locate a business enterprise.  Following is tax rate information gleaned from official sites in each of the indicated states:

Just based on the information above regarding taxes, for example, if a business owner can manufacture a widget in Nevada and ship it to a market in California the business decision is very simple and very straight forward.

Now add the various and sundry regulatory requirements on the backs of business owners.  Between the polyglot of acronym (EDD, FWS, WC, DTSC, CARB, PUC, SWRCB, etc.) programs, business owners get very frustrated with government. Each business faces significant staffing and reporting requirements associated with each of these acronym programs; every single one of these programs has a unique reporting format rife with opportunities to screw something up, together with audits and potential fines.

Our decision makers need to look in the mirror and ask themselves: why are other geographic areas booming relative to virtually any area in California even during the coronavirus crisis? Boise ID, Reno NV, Vancouver WA, Scottsdale AZ and other non-California locations are getting significant inflows of California transplants bringing enterprises, wealth, jobs, entrepreneurial talents and disposable incomes to new homes.