I have never thought of California as being inhospitable to business.
Maybe tax jurisdictions like states should stop "competing" against each other trying to attract businesses by cutting each other's and their own throats. Don't you risk ending up with public policy decided by corporate demands instead of by citizens? Or don't votes count as much as dollars?
I have seen numerous companies catered to by public largesse here in Canada, but I'm not sure it ever paid off. You hand them a bunch of cash to "create" jobs, and they lay people off anyway, while paying themselves healthy bonuses. Why does a government have to use taxpayer money to convince a company to "create" jobs? Shouldn't companies be doing that anyway.
CA has been getting worse with their taxes over the years. They have been essentially passing "temporary" tax policies through votes on presidential election years directed at businesses and high yearners using clever names, like as if they are for the benefit of schooling. Who is against making schooling better, right? Since most of the public is out to vote on these years and most are okay voting against rich people, they pass. Shortly thereafter, they pass an injunction to make the tax permanent though, very sneaky with even better names.
This has been going on for the last ten years and it is having it's effects. For instance, CA takes longer then any other state to recover from a recession now.
But anyway, it is not stopping either. There is a tax up for a vote this year where businesses who make over $1M in revenue will see an increase in their property taxes. To the average person, $1M in revenue sounds big, so most this will think this only effects large corporations. However, a well run restaurant will clear that in a year (well, maybe not anymore). It will more then likely pass, causing even more people to leave the State.
Lee Ohanian, an economist in CA, has been doing podcasts with the Hoover Institute over this exact fact in the past few weeks.
Insofar as you comment about states not competing, well this is more complicated. Each state has it's own personality and priorities, and some states are such that you need more money to operate them. This then increases taxes to cover those expenses. Of course, it is always easy to tax the rich, however doing so distorts habits that then lead to change, like moving to a different state.
On top of that, both CA and NY made public pension promises much higher then they could afford merely to get votes to win re-elections. And even if these politicians making these promises knew they would never be able to pay out, by the time the pensions went into effect, they would have been long retired. The bill though is coming due, which is why Cuomo and Newsom are looking for state debt forgiveness in any up coming additional C-19 packages. I am emphatically against it, since it will allow politicians to yet again kick the can down the road instead of solving the problem.
Note: if NY wanted only debt foregiveness for debts incurred by the C-19 response only, I'd be okay with that.
