Governor Scott Adds California’s Businesses to His Target List
Between the years of 1995 and 2010, the State of California lost $31.8 billion dollars in net adjusted gross income (net AGI) to states with more enticing income tax structures. In addition, California currently levies the highest marginal personal income tax in the nation (at 13.3 percent) and the fourth-highest state and local tax burden (at 11.2 percent). These are indisputable numbers, directly from IRS data, as documented in Travis H. Brown’s book How Money Walks. California’s unemployment rate is 1.5 percent above the national average, at 9 percent. In spite of the positive spin California Governor Jerry Brown puts on his state’s economic situation, the facts speak for themselves. Over this 15 year period, businesses and people packed up and left the Golden State, in droves. The trend continued into 2011, as 254 companies left California.
As the economy in California worsens – and is now further compounded by the recent passage of Proposition 30, which drops yet another tax bomb on the remaining populace – it is a sure bet that even more Californians have reached their limit and are poised to jump ship. Tired of the business bashing, two dozen more companies have now committed to leaving the Golden State. With their decisions made, the biggest question in many a board room is undoubtedly: Which state will give us the best opportunity for growth, a plentiful skilled workforce, and a fair tax environment to boost our bottom line?
With all of this potential revenue at stake, it is little wonder that the competition would heat up between governors to lure California’s discontented businesspeople. Florida Governor Rick Scott is one of several governors who are heavily engaged in the fight to bring these businesses into their state. Two of the greatest recipients of the migrating wealth in the past have been the states of Texas and Florida. Texas gained $22 billion, but Florida has gained the lion’s share, at $86.4 billion. Florida is one of nine states that can tout zero personal income tax, and it is prepared to offer lucrative tax incentive packages to potential new employers.
Governor Scott has made job creation his top priority since coming into office. While his sights are clearly and overtly fixed on snagging California businesses, no state is off limits. In addition to his direct outreach to California, Florida’s “Recruiter in Chief” recently sent letters to the top 100 companies in Illinois, encouraging them to buy a one-way ticket to his state. Just recently, the governor announced that the Hertz Corporation will be relocating its corporate headquarters from New Jersey to southwest Florida. In addition, an increasing number of financial firms, such as private equity and hedge funds, are fleeing New York’s sky-high city and state tax rates and relocating to the welcoming, business-friendly climate in Florida’s southeastern Palm Beach County.
All 50 states are vying for a greater piece of the $2 trillion bonanza of wealth moving between the states, but only a handful can offer the tax advantages and quality of life of Florida. Governor Scott is on a mission to carry that message throughout the country, and as the facts show, he is succeeding.