It’s been in the news recently that a lot of business professionals are making the move from California to Texas. A notable example is podcast mogol Joe Rogan who recently announced his move from Los Angeles to Texas in search of “a little bit more freedom.” With Los Angeles for a long time being the most popular and opportune place to move, the recent wave of relocation begs the question, why Texas? Here are four reasons why business owners are making the move from California to Texas.
Lenient Workforce Laws
California has some of the strictest labor laws in the country, and they increase each year. This includes more wage laws, additional discrimination and retaliatory regulations, the fair pay act, sick leave, family leave and much more. Businesses are moving from California to Texas to receive cheaper labor, avoid strict standards and lessen the likelihood of getting hit by debilitating employee lawsuits. Another reason business owners are making the move is because the Regulation Compliance costs for small businesses in California (for less than 100 employees) are almost $135,000 per year. Overall, it’s more profit and less out of the business owner’s pocket to operate a business in Texas compared to California.
Lower Cost of Living
Texas has an overall significantly lower cost of living than California does. The state minimum wage is also lower, as it’s $7.25/hr in Texas compared to $12.00/hr in California. This is a large incentive to make the move to Texas. Texas has a great job market, low housing costs, and a growing economy.
Better Overall Economy
Texas is proud to have one of the best economies in the country. While the economy fluctuates each year, the recent numbers put Texas at the top. Texas is home to two of the biggest markets in the country; oil and mining. Since Texas has an overall lower cost of living, combined with the booming economy, more and more people are flocking to live in places like San Antonio, Austin and Houston, which only grows the economy more.
Lower Business Tax
California has a high state tax, in addition to the high income tax. California’s tax rate averages at 7.25% with the maximum at 8.25%. These rates are much higher than Texas’ rates. Texans won’t mind spending a little more since the sales tax is so low. So, the lower sales tax rate is yet another reason we see businesses are moving from California to Texas.
These are just some of the many reasons business owners are choosing to make the move from California to Texas. With the lower tax rates, lower cost of living, and less overall restrictions, making the move to Texas is a financially smart move for any business owner!