States: To hear Hillary Clinton and Bernie Sanders, you’d think that taxes can go up to 60% or even 80%, and businesses and investors will just … pay up. But the growing number of businesses stampeding out of high tax areas suggest that they’re very wrong.
We got more evidence of that this week when CKE Restaurants, the corporate parent of Hardee’s and Carl’s Jr. restaurants, announced that they are relocating to Nashville, Tennessee.
Hardee’s will move its headquarters from St. Louis, Missouri, to Nashville, Tennessee, one of America’s fastest growing states.
Oh, and did we mention that the state has no personal income tax?
Meanwhile, the Carl’s Jr. move puts more egg on the face of California and the political class in Sacramento. Hamburger fast food chain Carl’s Jr. was founded in California and for years has been headquartered in Carpinteria, California. The highest income tax rate in California is 13%, so moving to Tennessee, where the tax rate is zero, will save the company millions of dollars on taxes a year.
Yes, we know that CKE’s official line is that the firm is relocating because it has less need for office space as it consolidates operations. But the company executives say this with a wink. Tax savings are a big factor, as is the stifling regulatory environment on the left coast, where businesses are treated like villains and rich people as cash dispensers for big government programs. It’s not a coincidence that CKE’s CEO Andy Puzder has been one of the leading critics of high taxes and onerous rules in Washington D.C. and Sacramento.
The state legislative group ALEC finds in its latest “Rich States, Poor States” rating of the states on business climate that California ranks 44th of all the states in business competitiveness. California has lost roughly 9,000 companies over the last decade, with most of them moving to Texas, Florida, and Tennessee. Last year, in a major loss, Toyota moved its North American headquarters from the Golden State to North Texas.
Thanks to its high taxes and burdensome regulations, California’s hemorrhage of jobs and businesses won’t end soon.
Burger King recently relocated its headquarters out of the U.S. completely in favor of Canada, where the business tax rate is only about half what it is in America. Dozens of others have left through “inversions” to cut their tax burden.
So, thanks to the federal and state tax codes, American businesses are departing for friendlier shores — taking thousands of high-paying jobs with them.
Given all this, why do Clinton and Sanders keep saying that they are going to get more taxes out of the rich with higher tax rates? California is now going to get 13% of zero from Carl’s Jr., just as the state gets 13% of zero from Toyota. And Washington, D.C., will now get 35% of zero income from Burger King.
Hillary and Bernie say that they stand for the “working folks,” but the victims of their plundering the rich with high tax policies are middle-class families who are losing their jobs in California. To make America great again, one goal should be to make our national policies look more like those of Tennessee and less like those of California.