High Taxes and Crime Push California Businesses to Consider Out-of-State Moves

The damaging business climate is pushing many business owners in California to rethink their options and continue their work elsewhere, reports claim. 

The land of millionaires 

California is home to the most millionaires and billionaires in the US. The Bay Area is third on the global list of places with the largest numbers of ultra-wealthy, behind New York City and Tokyo. Yet, the state’s migration numbers skyrocketed, and many business owners are considering starting over in a more welcoming environment. 

Rising crime rates 

Some California-based business owners cited the high crime rates as the main reason they considered moving out. Commercial robberies and burglaries increased in nine of the fifteen largest counties in 2023, with Los Angeles County having the highest rate. Despite the drop in violent crimes, some business owners cannot keep up with burglaries and break-ins. 

High taxes 

California has among the nation’s highest taxes for business owners, but if that was not enough, the state raised the top income tax bracket from 13.3% to 14.4%. This tax rate applies to income over $1 million, making California the most expensive state for the wealthiest. 

The cost of living 

Along with high taxes, California also has a high cost of living. The LA Times cited the cost of living and the housing market as one of the driving factors for those who moved out of California or were thinking about it. The drop brought the number of Californias similar to those in 2015. California, one of the wealthiest economies in the world, also has many policies that business owners do not see as friendly. 

Prominent business owners discuss relocating 

California business owners Flavio Carvalho, Cherie Falwell, and Trish Aquino recently discussed a potential move to Texas. Flavio Carvalho, a lawyer and founder of a law firm in the San Francisco Bay area, shared that he disagrees with California’s direction and dislikes that his taxes are making it possible. 

The numbers from right-leaning sources 

RedBalloon and  PublicSq. ‘s Freedom Economy Index found that 86% of business owners in California say that crime has increased in their area. In comparison, 67% of the survey respondents claimed to be contemplating moving their headquarters out of state. But are things really that bad? Despite the source being “anti-woke,” there is no denying that the Golden State business owners face a harsh reality. 

Oakland business owners spoke up 

Small business owners in Oakland said they were scared for their lives after facing a series of burglaries. Jose Ortiz, owner of La Perla Restaurant, said they would stop paying taxes unless the city officials did something to stop the crime spree. Oritz and other business owners requested police patrols and cleaner streets. 

More want to join the tax protest 

Paul Phan, the owner of Dimond Cafe, shared that his business suffered four attacks and that joining the tax protest is a way to start a change. Phan noted that things are getting worse, and they are currently talking to city officials about their next steps. 

More rights for the employees 

The Golden State also expanded sick leave and benefit programs for the employees. While this is a noble thing, it gives business owners more reasons to rethink whether staying in the state is the best for them, especially if you add crime, tax rates, office space prices, warehouses, and manufacturing facilities into the equation. 

Raise of wages 

Fast food chains were hit with a new minimum wage of $20 per hour, the highest in the US. This has led to numerous workers losing their jobs, and some restaurants have already raised prices. Some small business owners are working at lower capacities and are among those who are thinking about leaving the Golden State.  

Accusations of soft approach to crime 

The state also faces backlash over the reported approach, which is considered soft on crime. According to Newsweek, the sharpest rises were noticed in knifepoint robberies and vehicle thefts. But, in a deeply divided nation, businesses also have another thing to consider: taking a stance on political and social issues. 

Texas and Nevada instead of California 

Texas, Florida, and Nevada are becoming preferred destinations for California business owners. The main attractions are lower taxes and lower living costs. Though today’s decision will likely not significantly shift California in the upcoming years, things might look differently after a decade. 

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