Many influential Americans in the spheres of media and business left sunny California for greener economic pastures in 2021.
Popular comedian, podcaster, and UFC color commentator Joe Rogan left Los Angeles for Austin, TX. Ben Shapiro and Jeremy Boering of The Daily Wire moved their company to Nashville, TN. And most recently, YouTube star Dave Rubin announced that he and his operation are relocating to Florida. All three have cited authoritarian COVID policies and excessive taxation as the main factors in their decision to leave southern California.
Some observers might dismiss media personalities like Shapiro, Rubin, and Rogan as “right-wing,” to explain why these media personalities would be unhappy under the tax and COVID policies of Governor Gavin Newsom and L.A. Mayor Eric Garcetti. (To be fair, Joe Rogan would surely take exception to right-wing labeling.) Yet the California exodus doesn’t end with folks who are connected to conservative media. Elon Musk, founder and CEO of both Tesla and SpaceX, moved his corporate headquarters from Los Angeles to the Austin, TX area, and chef and restaurateur Gordon Ramsay—of Hell’s Kitchen fame—also announced that he is moving his business from California to the Lone Star State.
There is no shortage of fortune 500 companies leaving California as well. Apple moved its U.S. headquarters from Santa Clara, CA, to Austin, TX; Nestle USA moved from L.A. To Arlington, VA; and Oracle moved from San Mateo, CA, also to Austin.
California’s overbearing state government is driving away all sorts, not only the rich, famous, and/or political. In 2020, the state’s population decreased for the first time in recorded history, to the point where California lost a seat in the U.S. House of Representatives. Adam Millsap, writing for Forbes in August, noted that California “is starting to develop a two-tiered society, with higher-income, educated tech workers clustering in the major coastal cities while lower-income, less-educated workers are relegated to the interior of the state or forced out altogether.”
Taxation is certainly a significant factor driving both high-income and middle-class citizens away from the Golden State. California’s top marginal income tax rate is 12.3%. A few states like Texas, Florida, and Tennessee have no state income tax. California is also the most regulated state in the nation with some 396,000 regulatory restrictions on the books, dwarfing even New York, the second-most-regulated state in the country by 100,000. Consumer prices in California are 16% higher than the national average. Only Hawaii has higher consumer prices and, for obvious reasons, shipping products to an island 2,500 miles from the mainland incurs additional costs. The average price for a gallon of gas in California was $4.68 with a national average of $3.32, as of December 2021, according to AAA.
California isn’t the only state struggling to keep residents and businesses from fleeing. The Brooklyn Eagle reported in August that over 33,500 New Yorkers had relocated to Florida between September 2020 and March 2021, a 32% increase from the same period the prior year.
Top earners in New York pay the highest state income tax rate in the country at 14.8% compared to Floridians who pay nothing in state income tax. For citizens concerned with individual liberty, New York has spent much of the past two years locked down, and New Yorkers are unable to go to restaurants and other public places without a vaccine passport and a mask, compared to Florida where the economy has been open since the early days of the COVID-19 pandemic. New York’s restrictions have failed to stop the virus; the state has a COVID death rate of 300 per 100,000, one of the highest rates in the nation. This compares to Florida’s rate of 289 deaths per 100,000, despite Florida having a significantly older population.
The seven fastest-growing states in the nation, per the 2020 census—Idaho, Arizona, Nevada, Utah, Texas, South Carolina, and Florida—have either no state income tax or have low tax rates compared to the national average. Only Arizona has a higher rate of COVID deaths per 100,000 than New York.
It is unlikely that California and New York will change course anytime soon. A recent effort to recall California Governor Newsom went down in spectacular fashion. New York Governor Kathy Hochul, who took over after Governor Andrew Cuomo was forced to resign in August following a sexual harassment scandal, is promising to continue enforcement of the state’s harsh COVID protocols despite their apparent failure to control the virus.
With record-setting job openings nationwide, the American people have options. As long as those options exist, it is safe to project that citizens will continue to choose low-tax states without strict lockdown policies