California Dreamin'—of Jobs in Texas

CA Worst Place to Do Business, 7 Years In a Row

WILL the LAST BUSINESS in CALIFORNIA PLEASE TURN OUT the (ICLEI-APPROVED) LIGHT BULB?
http://www.varight.com/news/will-...ight-bulb/

Retroactive tax bills and the elimination of a state tax-break for California's entrepreneurs and early stage investors could force them to move to ... Texas.


FORTUNE -- Entrepreneurs and investors in California can expect to receive a rude shock in the mail if they sold their company in the last four years. Not only did the state's Franchise Tax Board eliminate a tax break on capital gains for small business owners and investors, it announced the tax would be reinstated retroactively. This means those who benefitted from the break can expect a bill for unpaid taxes, plus interest, stretching all the way back to 2008.

Since 1993, California entrepreneurs and early-stage investors have enjoyed a partial state income tax exclusion on sales of stock of a "qualified" small business. This was an incentive for people to start and keep businesses in California. If they sold their company, they would only have to pay half of the regular state tax rate on what they gained—about 4.5% instead of 9%. That could include founders of companies such as Instagram and Yelp (YELP).

The FTB announced its decision last December and the ruling went into effect earlier this year. Now, not only will stockholders have to pay the full tax rate on capital gains, which has risen to about 13%, but they'll also be billed retroactively for 50% of the taxes they excluded. The FTB says this will affect over 2,500 people and bring in about $120 million in revenue.

Not surprisingly, the changes have led to concern among entrepreneurs.

Ethan Anderson, co-founder and CEO of startup MyTime, says the FTB's actions will make entrepreneurs think twice about setting up a business in the state. "You can't really plan for the future when the rules of the game are changing retroactively," says Anderson. "You feel insecure investing in the state, why would you take that additional risk when they've set a precedent now showing that anything could happen anytime?"

It might just be in Texas. Anderson says he already knew of at least one California entrepreneur who had bought a house there to establish out of state residency. The Lone Star state is home to Austin, one of California Business Defense">the fastest growing tech hubs in the country. Unlike other hubs like New York and Boston, it offers lower taxes, less regulation, and relatively inexpensive real estate.

The California tax that terrifies tech
[cnn.com]

http://www.dailykos.com/story/201...Rick-Perry

"Conservatives have made hay of reports of California companies leaving the state. And it's true! Some have—254 in 2011, to be exact. ...On the other hand, 132,000 new businesses were created that same year..."

" these changes were enough to put California's budget back in the black for the first time in many years, even as Texas suffers from high poverty, low wages and a drastically failing education system."

http://www.nytimes.com/2011/08/15....html?_r=0

http://www.dailykos.com/story/201...Rick-Perry

"Conservatives have made hay of reports of California companies leaving the state. And it's true! Some have—254 in 2011, to be exact. ...On the other hand, 132,000 new businesses were created that same year..."

" these changes were enough to put California's budget back in the black for the first time in many years, even as Texas suffers from high poverty, low wages and a drastically failing education system."

http://www.nytimes.com/2011/08/15....html?_r=0

"Conservatives have made hay of reports of California companies leaving the state. And it's true! Some have—254 in 2011, to be exact. ...On the other hand, 132,000 new businesses were created that same year..."

Lol, August 2011.

California unemployment is 9.8

Texas unemployment is 6.1

https://www.google.com/publicdata...&ind=false

Gotta love the Lone Star state's Texas-sized poverty rate, low wages, and failing education system too. Everything is bigger there, after all. If I was looking for low skilled, low paid workers, I'd go there first.

Gotta love the Lone Star state's Texas-sized poverty rate, low wages, and failing education system too. Everything is bigger there, after all. If I was looking for low skilled, low paid workers, I'd go there first.

yup. texas, sure you can get a job here, but good luck thinking that job will get you out of poverty, get you healthcare, get your kids a decent education.

Yeah. Definitely better to end up in CA, where they have the lowest credit rating in the country AND damn near the lowest per-pupil spending [svefoundation.org] on education. At least Texas knows how to farking manage a budget.

They definitely pay their prison guards [gawker.com] well though. If only their higher ed institutions [huffingtonpost.com] were so lucky.