A Stanford University study indicates that more businesses have left California this year than in all of 2020. As taxes and regulations choke down the world’s most dynamic and attractive economy, even the COVID pandemic and assorted variants are becoming lame excuses for the commercial exodus.
The authors of the study found that the rate at which companies are leaving is proliferating. The rate over the first full six months of this year is almost double that of 2020. They also note that the rate is likely underestimated since many small businesses cannot file tax and regulation compliance reports when closing their local presence. Small companies also receive much fewer media attention when they move away.
The Stanford study takes a deeper dive into the rush to leave the Golden State and finds a “damning trend.” The authors give the common reasons for businesses going, including high taxes, impossible regulations, expensive labor, crippling energy expenses, and a generally declining personal quality of life.
As Stephen Green notes at PJ Media, Democrats have killed the California Dream, just as they have destroyed New York City and other blue-state strongholds. California has become the most oppressive state in the union for anyone who wants to start a small business.
Green cites Brad Polumbo’s observation that progressive policy-making and regulatory “Karenism” only leaves room for the most well-connected startups in Silicon Valley to have a realistic chance of making a go of it in California.
When businesses leave California, they take more than just the jobs that can be counted. Local investment, taxes, and charitable activities all disappear as well.
The study shows that the top destination states for companies bailing out of California include Texas, Arizona, and Tennessee. Not surprisingly, the places that businesses are moving to have far more business-friendly tax and regulatory policies.
The lesson for California is evident but is falling on deaf ears. When people can vote with their feet, they will seek out free markets over centralized planning and control. Even the wealthiest and most beautiful state in the nation cannot ignore that reality forever.