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July 16, 2009

Tracking Republican Myth That Business Are Leaving Because Of Taxes

-- by Dave Johnson

This post originally appeared at Speak Out California.

I looked around and found that "businesses are leaving the state because of taxes" is one of those drumbeats that the corporate conservatives are using.  (Also, FYI the wealthy are leaving, too, parking their yachts in Salt Lake I guess.)

I wrote about this myth the other day, basically you pay taxes on profits and you certainly don't pack up and leave profits behind.  I wrote,

Oh, one more thing for the slower-thinking Republicans out there: profits are a good thing, not a bad thing.  And when you are making a profit the last thing you do is pack up your business and leave behind the circumstances that enabled making that profit.

So I looked around for "businesses are leaving the state" articles.  Here are a few:

A Republican member of the Assembly writes, Governmental Restrictions, High Taxes Driving Businesses & Jobs Out Of California.

Oops, the example company didn't leave, it started in Nevada, and it wasn't because of taxes it was because they wanted "freedom" to dump toxins into the environment.

Businesses and wealthy individuals flee state because of taxes.

Oops this is another company that started in Nevada.  This time it was an income tax avoidance scheme where Californians set up the company in Nevada - but still live here. So it's a PO box, not employees, etc.
 
This one quotes a Republican Party official,

"The high cost of living that continues to force Californians out of state should serve as a powerful reminder of the effect high taxes are having on our society," said Ron Nehring, the Republican state party chairman.
But doesn't give any examples, and in fact shows how California has very favorable business conditions, credits, and is the only state that doesn't ask oil companies to pay for the oil they take.

California's High Taxes and Burdensome Regulations Drive People and Businesses Away -- scary title, lots of scary words, but no examples of businesses actually leaving the state.

Another Company Leaving California because of High Taxes, Regulations  - Oops, this one is leaving the state because they want to pollute the air, not because of taxes.  Nice title, though. Scary.

We went through a flurry of this a few years ago, too.  Did any leave then? Let's see what we can find.

Companies Can't Leave CA Fast Enough - A title insurer left the state.  The 2003 article doesn't explain why but mentions retail energy rates.  Remember Enron, Bush, all that?

California proves too costly for departing businesses,

Coast Converters is spending $800,000 to move to Las Vegas, but the Los Angeles plastic bag manufacturer will save enough on workers' compensation, electricity and other costs to recover that in less than a year, CEO Mitchell Greif says.

"It's really an unfair business practice to allow companies to move to Nevada and sell into California," Greif says. "But I'm doing it."


Nope, not taxes.  And how do you like living in the desert, Mitchell?  Another 2003 electricity-costs thing.  You want deregulation?  Deregulating energy costs worked out great, no?

Nation's Business.  Oops, the headlines are misleading, they are leaving because of costs.  Yes, it costs more to live here because people are coming here, not leaving.  Also,

... 10 percent of the 90 Southern California companies responding said they
"definitely" plan to move some or all operations from California within a year, and an additional 13 percent said they would "probably" do so.

OOPS, this one is from 1993, before the huge business boom.  Sorry.  I guess all the businesses left California.  Oh, wait...

Wait, here are some more articles:

New York's Taxes Send People and Businesses Out Of State -- Maybe they're coming here.

Are Millionaires Leaving Maryland to Escape Higher Taxes? -- Maybe they are passing California's millionaires going the other way.

Leaving Oregon, and its taxes, behind

Executives say firms may leave state if computer services levy is not repealed (Maryland)

Poll shows many mull leaving state (Buffalo)

NY's High Taxes Drive Small Business Away, Too

I guess all the businesses are leaving ALL the states!

Click through to Speak Out California

Posted by Dave Johnson at July 16, 2009 9:05 PM


Comments

Oh, I love it! Thank you.

I lived in San Francisco in the late 60s. I left (Yes! I was DRIVEN OUT of California by an insidious plot -- my family was in the east and so was the weather I prefer) in 1970, but I had encountered a group called, IIRC, Cal Depop.

The idea was that people should be encouraged to leave California, because the state in 1970 simply could not absorb any more people. At this growth rate, claimed the de-poppers, by 2000 everyone in the United States will be living in California.

You can see the reasoning: plot the rate at which Cal population was increasing, and plot the growth of the U.S. population -- and dang, there was the proof.

Well, in about 1970, the California population was about 20 million. The state was strained to the utmost, remember? But now in 2009 it's around 39 million.

Today's catastrophists must be concluding that every single one of those 39 million is a taker and not a giver. They're all on the dole, or state employees, or pensioners, or something that doesn't contribute to the well-being of the state at all.

I don't have the time to check New York's numbers, but they probably tell a story that's nothing like what Limbaugh and Golisano claim. In a little while, all of them will be complaining about Florida too, because they're complainers.

Posted by: Diggitt [TypeKey Profile Page] at July 17, 2009 10:10 AM

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