Toyota moving to Texas

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irvinehomeowner said:
The company that makes Sriracha is being courted by Texas.

Oh noooooooooooooo!
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I can tell you from a personal relationship.. that they will not be moving.
 
http://www.ocregister.com/articles/business-614262-california-states.html

Editorial: California bad for business

Some of the CEOs? comments about California?s business climate were quite telling ? and sobering:

? ?California goes out of its way to be anti-business, and particularly where one might put manufacturing and/or distribution operations.?

? ?We relocated our corporate office from Los Angeles to Atlanta in 2006 largely because of the regulatory and unfriendly tax environment in the state of California. . . . Would make the same decision if I had to do it all over again.?

? ?California could hardly do more to discourage business if that was the goal. The regulatory, tax and political environment are crushing.?

Chief Executive magazine Editor-in-Chief J.P. Donlon illustrated how California?s tangle of red tape has led to its shameful performance in the survey. ?The Economist reports that it takes two years to open a new restaurant in the Golden State compared to six to eight weeks in Texas,? he wrote. ?The task of unraveling the byzantine layers of regulations seems insurmountable. The jungle is too thick to be pruned. That?s why Carpenteria California CKE Restaurants (owner of Carl?s Jr.) is committed to opening 300 restaurants in Texas, but has no plans for new restaurants in California.?
 
[size=12pt]Not my opinion...your own LA times articles'.[/size]

Texas was the only state that added more jobs, growing by 348,000 over the same period

..and Tesla will probably employ even more people in Texas soon...

According to a filing with the SEC, Tesla will build the ?Gigafactory? battery plant in Arizona, Nevada, New Mexico or Texas. The 10 million-square-foot facility is slated to open in 2017. It will employ 6,500 people once it?s fully operational in 2020.
 
thatOSguy said:
The picture isn't as grim in California as you make it out to be.
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MoreKaos has said this before, but part of his point is that if you have these big name employers here, why not try to keep them here. you mention Tesla surpassed toyota, and just wait, give it time and tesla will follow toyota out the door.
 
thatOSguy said:
qwerty said:
thatOSguy said:
The picture isn't as grim in California as you make it out to be.
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MoreKaos has said this before, but part of his point is that if you have these big name employers here, why not try to keep them here. you mention Tesla surpassed toyota, and just wait, give it time and tesla will follow toyota out the door.
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Companies move to lower their cost basis. Generally speaking, salaries are the first area of opportunity when considering an out-of-state relo, then commercial rent. Regulatory issues are a PITA, but not enough to warrant a significant relo.

So even if we put our regulatory environment at parity with Texas, Toyota would still have moved. Hell, they're moving out of KENTUCKY as part of this consolidation.

So I'm not sure what the argument is. Lowering the cost basis for housing would help, which means more mass transit to inland areas. But projects like mass transit are DOA with the right.
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I think one big factor that you didn't address is CA corporate income tax. Texas doesn't have it.
 
thatOSguy said:
What companies would have expanded here or not moved out had we repealed corporate income tax?

Remember corporations benefit from Prop 13, which keeps property taxes lower than Texas on a relative basis.
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you assume that a corporation owns their land, a lot of companies lease because it is too expensive to buy land and build your own facility.  so if both companies lease property taxes arent even an issue, besides, higher property taxes in texas are offset by the lower land cost in texas.

to answer your question, we dont even need to provide examples of actual companies. just do the math. from a corporate income tax perspective, if you had a company based in each state (lets assume all their sales occured in their respective states for simplicity) that had revenue of $100M and op profits of $15M, in CA the tax liability at the corporate tax rate of 8.84% would be $1,326,000 vs $0 in texas. that is just the savings in taxes and im sure there are lot of savings in other places. that is a decent amount of savings for a $100M revenue company.

now for certain companies it could still make sense to stay in CA depending on their overall tax structure (income apportioned to other states other than CA) or if they invest heavily in R&D which can generate a CA tax credit that can offset a large chunk, if not all, their CA tax liability. but for a manufacturer who has no R&D and has most of their income apportioned to CA it probably makes sense to move
 
thatOSguy said:
but for a manufacturer who has no R&D and has most of their income apportioned to CA it probably makes sense to move
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Many companies don't own the property they're in -- fair play.

You also know as well as I do that NOLs and other tools easily make many companies non-cash taxpayers. It's the salary difference between the two states that far outweighs tax savings, especially after applying the many tools that sophisticated companies use.
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I don't disagree that wages are probably one of the biggest cost savings. NOLs are typically temporary, because soon enough you'll be out of business anyway if all you do is generate NOLs, although there are some exceptions.  I was just trying to illustrate that all things being equal, the tax savings alone may make it worthwhile to some companies to leave, public companies in particular who are trying to increase earnings.
 
thatOSguy said:
but for a manufacturer who has no R&D and has most of their income apportioned to CA it probably makes sense to move
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Many companies don't own the property they're in -- fair play.

You also know as well as I do that NOLs and other tools easily make many companies non-cash taxpayers. It's the salary difference between the two states that far outweighs tax savings, especially after applying the many tools that sophisticated companies use.
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Toyota is making money so they don't have NOLs. Trust me the tax savings is huge. Tax savings is huge for the comapny and it's employees.
 
I have several friends who are in the move dilemma with Toyota.  Perhaps the salaries of the existing employees in Plano may be lower but the package they are showing the Cali people is the same or better than what they are currently getting.  Granted, that may be a retention incentive but all things being equal, they are not saving on salaries to those they want to retain.
 
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