Last week, my friend Ethan announced that he is moving to Ohio. Ethan is an extremely bright entrepreneur in his mid-thirties, who grew up in Southern California. He’s civic minded – joined non-profit boards, gave to charities what he could afford, and was even been elected to his local water board.
He’s moving because his business is doing so much better in Ohio than in California, where it began. Honestly, the business climate that Sacramento has created is so bad that the usual emotional ties are no longer strong enough to keep Ethan here.
This was déjà vu for me. Twenty years ago, another friend, Steve, then in his mid-forties, announced that he was moving his successful Tustin-based aerospace company to Texas. His 200-plus employees could keep their jobs if they chose to move with him, but few did.
“Each year, state and local taxes and regulations become harsher for my business,” he explained as he despaired about leaving the state where he grew up. But Harvard had taught him to read a trend line, and the trend showed declining profits in California, expanding profits if he took his business to Texas. Simple to understand really. So he left with his family and his business to a state that was rational about taxes and regulations. There, he and his business thrived.
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