Lone Star vs. Golden State – Nedelja

Closes the Tesla car factory in Fremont and builds a third Gigafaktori factory in Austin (one operates in China and the other in Germany).

The news of the relocation of the world’s second-richest man echoed like a bomb, although it was not unexpected.

The hint of such a move was in May, when Musk had a dangerous dispute with the Alamida district authorities, who did not allow him to continue production in Fremont due to the corona epidemic.

That fight was the last straw that broke the camel’s back and forced him to initiate a commercial evacuation from California.

“Tesla will immediately move its headquarters and future programs to Texas. Tesla is the last company to produce cars in California. SpaceX is the last airline to have significant production in California.” There used to be more than a dozen car factories. in California, and it was also the center of the aviation industry, “Musk said.

The key reason for fleeing Golden State business is the poor regulatory and business climate that Musk compares to the complacency of Golden State Warriors basketball players after several victories who, however, never win the championship.

Lorena González, a very influential member of the San Diego Democratic Party in the California Congress, showed what the government thinks about Mask’s decision, who wrote on her Twitter account: F * ck Elon Musk.

After a discussion with lawmakers in California, Musk contacted Texas authorities in July and immediately secured a location around Austin and a permit for the factory, which will be completed in a few weeks.

For a similar investment company in California, Musk would spend five years and millions of dollars to pay for the usual green mail (environmental lawsuit).

“Innovation startups are drowning in the high costs of complying with regulations. “California should get out of the way of innovators,” Musk said.

The owner of the Tesla and SpaceX engines is not an isolated case. Three days after Mask and the company, Oracle announced that it would move its headquarters from California to Austin.

And a few days before Mask, Hewlett Packard Enterprise (HPE) announced the move from San Francisco to Houston.

HPE is one of the 50 largest Fortune 500 companies relocating to Texas.

And John Lonsdale, the founder of Palantir and Adepar, decided to move to Texas.

“I love California, but I had to go,” said Lonsdale, who blamed politicians on the bigoted left in California for those responsible for the dark business environment, dire energy situation and the collapse of public safety.

Commercial real estate agent John Gisely also came to Texas from California and opened Waterloo Capital Private Equity.

“Entrepreneurs in California are facing a higher government whose aspiration is to tax and regulate everything,” says Giseli.

Among the first swallows to arrive from California and settle in Westlake, Texas, was the financial giant Charles Schwab Corporation (which manages $ 4.3 trillion in assets), which bought TD Ameritrade for $ 26 billion last year.

“Businesses are leaving California because the business climate continues to deteriorate, especially due to rigid measures to protect worker rights and Governor Gavin Newsom’s wasted budget,” said Joseph Vranic, owner of Spectrum Location Solutions. disregard for business. “

Vranić claims that every year for the past 12 years, Texas ranks first in terms of attracting California businesses – about 660 of them moved 765 facilities to Texas in 2018 and 2019.

Meu njima su ExxonMobil, AT&T, Sisco, American Airlines, Lockheed Martin, JPC Penney Co, FedEx, Raytheon, PennyMac.

The Canadian Fraser Public Policy Institute ranked California the fourth worst country in the United States in terms of economic freedoms and Texas the fourth best country.

Entrepreneurs cite California’s repressive business climate, high taxes, and expensive commercial and residential spaces as reasons for the move.

The recent decision by Congress to increase the business property tax will provide the state with an additional $ 12.5 billion, but will not save California’s budget, which has fallen to the brink of bankruptcy and a deficit of $ 54.3 billion. of dollars.

And as key reasons for coming to Texas, business owners cite the lack of taxes on citizens’ profits and income.

For example, Elon Musk will not pay a capital gains tax of 13.3 percent if he sells Tesla stock or receives an annual bonus that he would have had to pay if he had stayed in California.

The only tax in Texas that a citizen pays is sales tax. Business analysts have calculated that companies can save about 32 percent of operating costs by moving from California to Texas.

“The regulators in Texas are not blocking the business, they are relaxing it, they are more focused on growth than restrictions,” Giseli explains.

The Republican Governor of Texas, Greg Abbott, sees the Houston area as the new Silicon Valley and interprets the influx of businesses as follows: “Low taxes, a high quality of life, a superior workforce and the best universities are a environment in which innovative companies can thrive. “

Despite low taxes, Texas manages to cover public spending and has (until 2019) a balanced budget with no deficit.

Texans believe they can only stretch while they are.

A lot of money is spent on education, but not on social services.

For example, the University of Texas (nine universities and six university hospitals) has a budget of $ 14 billion.

There are unions in Texas, but the laws do not require workers to join them.

A high school teacher in California is paid much more thanks to the unions than a teacher at the University of Texas.

In order to pay those wages, California raised taxes that drove out businesses and the state was on the brink of bankruptcy.

There is also a significant difference between the two states in the character of the legislature.

Congress in Texas operates once (four months) in two years and during that time adopts a two-year budget.

Members of Congress have an annual salary of $ 7,500 and their parliamentary seat is not their real job.

This practically means that deputies have to bear the costs of the laws they adopt in their personal affairs.

And the California Congress works all year round and the deputies have a salary of about $ 90,000.

There is an anecdote that interprets the two philosophies of state governance in an understandable way.

The anecdote tells that the governor of California ran with the dog along a forest path, that a coyote appeared, attacked the dog and bit the governor who then called the animal control service, who caught the coyote and charged the state $ 200 for the tests and another $ 500 for your accommodation. to the asylum.

A vet is then called in to examine and remove the dead dog and charge $ 200.

The governor goes to the hospital and spends $ 3,500 to check for infection and bandage the wound.

The running track is closed for six months while a government agency conducts an investigation, which costs $ 100,000, to protect the area from dangerous animals.

The governor pays $ 50,000 from the budget for a citizen awareness program on coyotes.

Congress is spending $ 2 million to treat rabies more effectively and eradicate it permanently.

The continuation of the anecdote says that the governor of Texas runs with a dog that is attacked by a coyote, the governor draws a gun, kills the coyote and keeps running, and a dead coyote becomes the concern of the eagles.

Load?

The governor spent 50 cents.

This story describes two starkly contrasting visions of the future of America.

California and Texas are the two largest states in the United States in terms of population (40 and 29 million) and the strength of the economy.

If they were independent states, they would be the fifth (California) and the tenth (Texas) economy in the world.

They are also a real example of states (there are two thirds of them) where one party controls both houses of Congress and the governor’s office.

Democrats have been in power in California since 2011, and the Republican era in Texas has lasted since 2003.

Former Supreme Court Justice Louis Brandeis argues that such a rivalry is made possible by a constitutional structure that allows states to experiment with social and economic models without risk to the United States.

These two rival states developed radically different models whose basic configuration was determined by the ideas of the Democratic and Republican parties, respectively.

California is a high-tax and regulatory state that has huge costs for energy transition programs, labor rights, social security, public education, and health care.

Texas is a state with zero taxes on income and profits and minimal regulation (freedom of enterprise), a leading position in the world in oil production, spends more money attracting and supporting businesses, public infrastructure and education, But he refuses to expand the Obamacare program, limits union power, and doesn’t want to raise the minimum wage.

Such an economic model has made Texas an attractive place to live for low-income people as well.

Statistics say that from 2007 to 2016, more than a million people – not just the wealthy, but also those making less than $ 50,000 a year – left California, and that Texas was their most popular destination.

“The California-Texas duel will determine the political future of the United States. Voters can compare the costs and benefits of competing experiments and in the future can choose shades between the economic policies of Texas red and California blue. Given Under current circumstances, California may just be dreaming, “wrote Kenneth P. Miller, a professor at Clermont Macken College, for USA Today.

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