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California is Toxic for Business

Updated on October 16, 2011

Just as it was in the 60s, much of the world looks toward California, the Golden State, as some sort of bless by God entity. The state offers just about every type of terrain and climate one would like, it has always been the "cutting edge" and leader where much of the USA and world longs for. Trends start in California first.

One trend that the State should not be happy with is its government which burdens the population with America's worse taxes and heavy regulators for business creation and jobs. What usually happens is that firms start here, become huge, and move away from the State to continue growing (Apple, Yahoo, Monster...). California is toxic for business. A recent poll of business execs shows that 84% said that if their business was not already here, they would NOT start here. They go to Oregon, Arizona, Texas where labor costs and taxes are so much lower. Thus, the jobs go there also. Carls Jr. restaurants have now stopped opening new ones in the State because it can take up to two years to get approval, yet, 300 will open in Texas and the average time for approval is only six weeks. In the Golden State, regulations cost the businesses $493 billion. Even the solar industry is moving to other states to avoid excessive regulations and building costs.

California taxes make little senses. Those who are millionaires are taxed at 10.3%. Those earning $47,000 and up, pay 9.3%. The corporate tax in California is also the highest, almost 9%.

Making the mire even worse is the legal system in the state that allows consumers to sue firms for just minor violations of labor and environmental regulations. California also allows for plaintiffs to sue for damages if accommodations are not made for disabled people at business establishments. One person sued 1000 businesses and won an average settlement of $4000. This lawsuit allege the business did not provide enough seats for all employees.

The overall environment for business creation is as bad as in New York, the equation is complex but without new businesses starting in the State, job creation will be flat and decline.


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    • swordsbane profile image

      William Grant 5 years ago from Wisconsin

      It's not a matter of perspective. I do not pay the same percentage of my taxes as the rich do, either on paper or in reality. THAT IS NOT FAIR..... End of story. Either my taxes have to be decreased or the taxes on the rich have to be raised. Since my taxes (and those like me) historically do not have much of an influence on the national budget (the top 10% do) then it makes sense to raise the upper tax rate so that it is in line with the rest of the country.

      And that's all.

    • perrya profile image

      perrya 6 years ago

      Yes, all a matter of perspective, for sure!

    • swordsbane profile image

      William Grant 6 years ago from Wisconsin

      California taxes on millionaires in 10.3%?? and they only pay 9.3%?? You say that like it's a bad thing. I should be so lucky.

      I live in Wisconsin. My taxes are 15%. You know what I pay? 15%. One year it dropped to 10%, but that was because my income went down. I don't recommend that for a tax break, though. Before you say California is "toxic" to business, get a little perspective. It could be that the rest of the country is too soft on them.

    • perrya profile image

      perrya 6 years ago

      The only other place I might live is to go back to Texas, Austin, specifically. But, California IS losing a lot of business.

    • INFJay profile image

      Jay Manriquez 6 years ago from Santa Rosa, California

      Having lived and worked in both Texas and California, I always come back to the Golden State. I do understand your point, I guess there are just many perspectives as I would rather pay higher taxes (and have paid) to fund education, programs for the disadvantaged, etc. It seems to me one way to give back...anyway just my thoughts. I always enjoy reading your hubs!