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If it was merely about taxes and regulations then nobody would want to choose California over almost any other state for their startup.

by owisd 2y ago

egorfine 2y ago
I'm not sure about that. Say, at-will employment exists in California and that's just one simple example off the top of my head. In Germany, an employee is near impossible to fire.
acdha 2y ago
This popular mythology in certain circles but it relies on people not calculating the effective total tax rate, including local and property taxes, and in that case California is the 13th cheapest state in the country: https://wallethub.com/edu/best-worst-states-to-be-a-taxpayer/2416 https://wallethub.com/edu/best-worst-states-to-be-a-taxpayer... You also want to consider what your taxes fund – for example, a startup founder probably benefits from proximity to two of the best university systems in the country and the better quality of life means you get more top people in your employee and networking pools. The ultra-rich are going to leave but a founder who isn’t already in the top income bracket is making an economically rational decision.
- scryers_bloom 2y ago
  This is extremely enlightening. I'm not surprised New York is basically the most expensive state to live in. There are obvious outliers though, such as Alaska, where you end up paying 50% markup on most basic home amenities just because of transit costs. I think I need to check up on where most of NYS money is really going.
Cthulhu_ 2y ago
A lot of companies are moving to Texas though (https://www.newsweek.com/multiple-companies-ditching-california-texas-2027506 https://www.newsweek.com/multiple-companies-ditching-califor...)
paleotrope 2y ago
Lag effect. 30-40 years ago, California was a different place, way more business friendly. Lots of military connected companies. Lots of money. Lots of people moving there. Educated workforce. It's very different now.

If it was merely about taxes and regulations then nobody would want to choose California over almost any other state for their startup.

by owisd 2y ago

If it was merely about taxes and regulations then nobody would want to choose California over almost any other state for their startup.

egorfine 2y ago

I'm not sure about that. Say, at-will employment exists in California and that's just one simple example off the top of my head. In Germany, an employee is near impossible to fire.

acdha 2y ago

This popular mythology in certain circles but it relies on people not calculating the effective total tax rate, including local and property taxes, and in that case California is the 13th cheapest state in the country: https://wallethub.com/edu/best-worst-states-to-be-a-taxpayer/2416 https://wallethub.com/edu/best-worst-states-to-be-a-taxpayer... You also want to consider what your taxes fund – for example, a startup founder probably benefits from proximity to two of the best university systems in the country and the better quality of life means you get more top people in your employee and networking pools. The ultra-rich are going to leave but a founder who isn’t already in the top income bracket is making an economically rational decision.

scryers_bloom 2y ago
This is extremely enlightening. I'm not surprised New York is basically the most expensive state to live in. There are obvious outliers though, such as Alaska, where you end up paying 50% markup on most basic home amenities just because of transit costs. I think I need to check up on where most of NYS money is really going.

Cthulhu_ 2y ago

A lot of companies are moving to Texas though (https://www.newsweek.com/multiple-companies-ditching-california-texas-2027506 https://www.newsweek.com/multiple-companies-ditching-califor...)

paleotrope 2y ago

Lag effect. 30-40 years ago, California was a different place, way more business friendly. Lots of military connected companies. Lots of money. Lots of people moving there. Educated workforce. It's very different now.