Toyota moves to Texas, another victim of California's hostile business climate

• Report rights infringement
• published: 03 Jun 2014
• views: 3145

California ranks 49th out of 50 states in terms of economic freedom; http://freedominthe50states.org/economic Why is economic freedom important? States and countries with more economic freedom 1. Have higher growth rates. 2. Have lower unemployment rates. 3. Have less debt per GDP. 4. Have more income equality. 5. Have more gender equality. 6. Have lower child labor rates. 7. Have less exploitation of the environment. 8. Make it easier to start or grow a business. 9. Make it easier for low and middle class families to create wealth. "The more economic freedom we have, the more able we are to make the world a better place." "In the year 2000, America had the 2nd most free economy in the world. By 2008, America's ranking had fallen to 10th. In 2012, economic freedom in America fell again... to 18th. Here is a link to more information on Economic Freedom; https://www.youtube.com/watch?v=6yqA6-ukmfg Businesses continue to flee the state and, as you see in this video, California politicians remain in denial about the hostile business environment. What is not quite so evident is that the people who suffer the most are small business owners and their employees. The center on Budget and Policy Priorities ranks California 2nd on its list of states with the most income inequality. Narrator: Texas governor Rick Perry taking a victory lap this week after Toyota announced will move its national headquarters and thousands of jobs to the Lone Star state after thirty years in California. It's a big win for the Governor who has made it his mission to lure companies away from high tax, high regulation states. California governor Jerry Brown, who is up for re-election this November, had this to say about the auto maker's move; "We have a few problems, we have lots of little burdens and regulations and taxes. But smart people figure out how to make it. And, as I always say, you get what you pay for." Wall Street editorial page writer Alicia Finley joins us with more. Well, good to know we get what we pay for. What did Toyota say about its move? Finley: Basically, they were very diplomatic about it and they said Texas has a very business friendly environment, zero income tax, affordable housing. This has nothing to do with California's anti-business environment. Narrator: But he just touted the pro business climate of Texas. So, let's just dig in a little into those costs. What is the cost burden, what are the advantages from a business point of view, of Texas versus California? Finley: First of all, it's right to work. So, it has a lower unionization rate. Narrator: It allows voluntary, you don't have to join a union? Finley: That's right. Narrator: So it reduces union labor? Finley: That's right. Lower energy prices. Narrator: Why? Finley: Why? Because they don't have all the green energy policies. Essentially, renewable mandates. Narrator: Renewable mandates are for solar, wind and other things which are higher cost. And because California imposed that on their energy industries, cost are higher in California that in Texas, is that right? Finley: That's right, about 50% higher in California. Narrator: 50% higher? Finley: And they're going up. That's the scary thing. They could go up even more. Narrator: What else? Finley: Gas prices are about seventy to eighty cents cheaper in Texas and the rest of the South. Narrator: Wow! And then you have the tax burden where the top marginal tax rate in California is what? Finley: 13.3% Narrator: And in Texas? Finley: Zero. Narrator: Zero. Then there is laughter. That'll even get Freeman's attention. Panelist: That'll get anyone's attention and that's why you've seen Texas really be the job creation star of the United States over the last decade and also, creating the middle class jobs that the national economy and the economy in California have not been creating.