SZABO: ¡Bienvenido a Miami!: California’s Business Loss Is Red States’ Gain

REUTERS/Fred Greaves

Carl Szabo NetChoice
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For the past couple of years, we’ve watched the exodus of people and businesses from Democrat-run states. Whether it’s banking moving from New York to Miami or manufacturing from Illinois to Indiana, Democrats’ anti-business attitudes, coupled with the rise of remote working, empowered America’s businesses to flee states that burden them with regulation and taxes.

Tech’s abandonment of California exemplifies this exodus. Literally called “Silicon Valley,” America’s technology industry became a cash-cow for California – pouring trillions into the state’s tax coffers, representing nearly 20% of its GDP and giving jobs to 1.7 million residents.

If all these tech businesses moved to states like Arizona, Utah, Tennessee or Iowa, it would more than double those states’ current GDP. That is why these states work to provide competitive business and work environments. They provide development incentives, low-cost and ample housing, lower crime and respect for the benefits of the business – not disgust at their success.

But as much as these Republican-led states work to make their business environment inviting, it is California’s rash actions in particular that is driving the tech industry to them. The latest examples come from California’s legislature and its Attorney General (AG).

In the past year, the Golden State considered raising taxes on small, medium and large businesses, regardless of economic sector. This month alone, California lawmakers enacted three laws purported to “take down tech” and make it easier for trial attorneys to sue tech businesses for billions. They passed a law to make it harder for Uber, Lyft, Doordash and many others to hire gig-workers. And the electric vehicle mandate and ban on natural gas appliances, without new energy production, has put the entire California power grid at risk – making running any business, especially a tech one, a questionable endeavor.

Most recently, the state’s AG filed an antitrust lawsuit against Amazon because the company required online sellers to show customers the lowest possible price, after a similar billion-dollar lawsuit paid for by taxpayers already failed in the District of Columbia. California’s suit, which has no legal chance, is a finger in the eye of Amazon’s billions of dollars invested in the state. And it’s an insult to the tens of thousands of California’s Amazon employees.

Of course, this attack on California’s home-grown tech businesses is nothing new. It’s so bad that despite California’s push to prop up electric vehicle manufacturing, Elon Musk moved his Tesla factory to Texas, a state that appreciated its presence. Likewise, Oracle and Hewlett-Packard – Silicon Valley founder companies – left California for more welcoming states. Ironically, Texas may provide California with some of its electric vehicles now mandated by state law.

Fortunately, Republican states and cities have an opportunity for growth and innovation. Miami’s Francis Suarez is welcoming tech businesses with open arms as he tries to make the city the new home of Silicon Valley. And Mayor Mattie Parker of Fort Worth Texas is providing tax credits and developing quality housing to help lure tech businesses. They recognize how California has not only taken these American success stories for granted but actively moved to make it harder for them to operate and grow. Republicans are providing California’s beaten-down businesses a shelter to build, grow and innovate.

As California continues down its self-destructive path of high taxes, disdain of business and oppressive regulatory and legislative environment, more companies will leave the state. What’s even more concerning is that many liberal states are modeling their business policies after California’s despite the state’s numerous failures.

Perhaps, for the sake of its residents, the Golden State’s leaders will realize their mistake before it’s too late. But if California remains hell-bent on beating down businesses, Republican policymakers in other states have a golden opportunity to show the kind of economic prosperity a business-friendly environment can create – and reap the political rewards.

Carl Szabo is Vice President and General Counsel for NetChoice, and a professor of internet law at the George Mason Antonin Scalia Law School. 

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller.