Remember how California is a state “burdened with a high tax rate, significant regulation and extreme housing costs”? Conservative think tanks like to claim it, and so does this New York Times writer. Yet if those “burdens” were so determinative, why would that same writer find this?
California is the capital of American business [...]
From 1965 through 1979, 10.07 percent of public companies were based in California. The number has continued to grow, so that from 2000-13, 19.46 percent of public companies had their headquarters in California.
That’s an astounding number. A state with 12 percent of our population now accounts for a fifth of all public companies. (In the 1970s, California was about 10 percent of the United States population.)
To be clear, the cost of housing in my adopted home state are definitely burdensome, trailing only those of Hawaii and Washington, DC (when did that happen?). But those supposedly burdensome regulations and taxes? They buy something. They buy a social safety net, security, the best public university system in the country (if not the world), culture and arts, sensible urban growth, a world-feeding agricultural sector, and a business climate that encourages not just the world’s entertainment center, but the world’s most innovative technology incubator. All the while, those regulations and taxes protect some of the world’s great natural wonders (Monterey Bay, Yosemite, Death Valley, Lake Tahoe, the Sierras, Redwood National Park) amidst great challenges, like massive population growth and drought.
Perhaps the real “burden” would be to lack those amenities, a burden most other states cannot overcome?
Massachusetts and New York do pretty well. Even Texas is in the picture, benefiting from a consolidation of energy and health care companies—but the Lone Star State has only half the public companies California does. So stats like this should put a lie to the notion that having regulations and taxes makes a state “business unfriendly.” If that were the case, places like Alabama, with their hostility toward workers and the most basic rules, would lead the way, and California would be left a barren wasteland. And it’s very clear: that’s not about to happen.