Exodus - Part 2 Elon Musk Departs

Back in July we asked "how big? and how long?" would be the exodus from the Bay Area?  We got one more view of just how big today when the Wall Street Journal reported that Elon Musk said at a WSJ CEO Summit council this week he has moved to Texas.

Taking up residence in Texas comes with personal benefits for Mr. Musk: The state doesn’t collect state income or capital-gains tax for individuals. The auto executive qualified this year for billions of dollars in stock-option compensation as part of a pay-package agreement, making him the second-richest person in the world.

During the spring, when Mr. Musk was sparring over coronavirus shelter-in-place orders that shut his factory near San Francisco, California Gov. Gavin Newsom told CNBC he was “not worried about Elon leaving any time soon” and the state was committed to the car maker’s success. “We may not be the cheapest place to do business but we are the best place to do business,” Mr. Newsom, a Democrat, said.

California’s taxes underlie many of the complaints. Its personal income tax tops out at 13.3% for amounts over $1 million a year, the highest in the nation. Capital gains are taxed at a similar rate.

In a separate piece this week, the WSJ also highlighted how mid-tier cities are gaining population at the expense of SF and NYC

For every person who moved to the Bay Area from Austin between April and October, 2.9 people moved in the other direction, according to an analysis from LinkedIn. That is a 39% increase from a year earlier.

Perhaps the Gavinor could make a phone call, apologize and get back Musk's tens of millions of dollars in annual California taxes.  He would also have to call the CEOs of HP Enterprise, Palantir and dozens of start-ups and sports stars.  But as the Journal noted "Many who call the Bay Area home have expressed relief at the departure of tech professionals who have been blamed for driving up the cost of living and congesting the freeways."  When I was an analyst, we called that a "going out of business strategy".  Nobody is less pleased with the over-development of the Peninsula than me, but if we are to fund the good stuff (schools, social services, infrastructure, pensions) and the bad stuff Newsom wants (high-cost rail, costly green policies, giveaways) then he might want to pick up the phone and start calling. 

Comments

[Barking Dog]

https://www.cnbc.com/amp/2020/12/11/oracle-is-moving-its-headquarters-from-silicon-valley-to-austin-texas.html

[Phinancier]

Oh boy, this one's gonna hurt. Unlike Tesla, Oracle actually has earnings to tax.

[Joe]

I had forgotten about a couple of other biggies:

Oracle joins numerous Bay Area companies that have moved their headquarters to Texas in recent years or months, including Charles Schwab, McKesson and Hewlett Packard Enterprise. Other companies, including Apple and Dropbox, are keeping their Silicon Valley headquarters, but expanding their presence in Texas.

https://www.sfchronicle.com/business/article/Oracle-to-move-headquarters-from-Redwood-City-to-15795539.php

[[email protected]]

Dear Joe,
Do you know what the COB Mayor and Elders are doing to support our Community, and create a Safe and Legal work environment for COB Employees?
Do the COB Elders and COB Dept. "Heads" "subscribe" and adhere to State of California Governor's Official Mandates?
In times like this, the opportunity to take advantage of "Labor" from Cops to Water Dept.
Joe Knows...
Joe Knows.

[JP]

The COB employees have the safest jobs around. No furloughs. No layoffs. No pay cuts. No cut hours. WTF. I wish half of them would quit so I could get their job.

[Everything's Jake]

These were good paying professional jobs (18,000 employees). Cisco and Intel will be next. Meanwhile, Newsom continues to preen and posture for the liberal loving media.
Please sign the "recall Gavin" petition if you are presented with one. It's the only way the pols in this one party state will learn that their misplaced policies have consequences.

[Phinancier]

(Bloomberg) -- Oracle Corp. co-founder Larry Ellison said he has moved his primary residence to Hawaii, becoming the latest Silicon Valley executive to depart the state where they built their fortunes.

Ellison, the world’s 11th-wealthiest person, notified his staff Monday of the move. Recode first reported the executive’s decision, which followed Oracle’s announcement Friday that it had shifted the company’s headquarters to Austin, Texas, from Redwood City, California.

[MBGA]

Those inclined probably are aware of VDH, but maybe some of you may not know of Victor Davis Hanson. Rather than posting a link I'll suggest looking this up yourself (liberals, don't bother wasting your time):

Wealth, Poverty, and Flight: The Same Old State of California

It's a two year old article but reading it again I'd say things are even worse than what he was saying back then.

[Phinancier]

California's General Fund relies on the top 0.5 percent: In his latest analysis, California Policy Center contributor Edward Ring discusses just how much of California's budget relies on the wealthy: "There were 89,000 Californians in 2018 who reported taxable income of over $1 million . . . one-half of one percent of the total filers." This top 0.5 percent pay 40 percent of all personal income taxes that California collects. It takes only a couple thousand of these seven-figure earners leaving the state to put a big dent in total tax revenues.

[Libertarian]

If only the high earners paid their "fair share"?
Right Dunham, Cynthia and the other fact deniers?

[Phinancier]

Another one. "As we continue to make strategic investments to best position Digital Realty for long-term growth, we are confident our expansion in Texas will help us meet the needs of our more than 4,000 global customers, while continuing to deliver value for our stakeholders, employees and the communities we serve around the world," Stein said in a statement.

[Phinancier]

Salesforce cancels 325,000 square foot lease in the Transbay district.