Nestle latest to leave California due to burdensome tax rate

Sarah Lee  Feb 15, 2017 5:57 pm

A Nestle Butterfinger and Crunch candy bars are arranged for a photo, Wednesday, June 1, 2016, in New York. (AP/Mark Lennihan) 

Nestle USA is the latest business to move operations from California to Virginia, due to the Golden State’s burdensome tax rate, skyrocketing cost of living and culture of anti-corporate activism, the Investor’s Business Daily reported.

According to an op-ed from IBD’s Terry Jones, Nestle was lured from Glendale, California, to Rosslyn, Virginia, through tax incentives worth $16 million. But the tax incentive played only a part in the decision by the chocolate company to relocate:

[A]part from having higher taxes, absurd housing costs and more regulations than nearly any other state, California’s wacky laws have turned the Golden State into a venue of choice for activist groups to file costly class action lawsuits — or to launch anti-corporate PR campaigns against big, wealthy targets like Nestle.

In recent years, Nestle has faced two such activist-led actions, both spurious: One involves allegations that Nestle improperly documented its anti-slave-labor policies. Not that it employed slave labor, it just didn’t document it online.

Corporate harassment has become the norm in a state where, writes Jones, “top officials and local politicians — virtually all of them far-left progressive Democrats — actively despise capitalism.”

Nestle is just the latest company to move from what Jones calls one of the “worst places to do business in America.” Since 2012, when the state passed Proposition 30 — a temporary raise in the personal income tax of the highest earners — other states have been actively recruiting California businesses.

According to a report by business relocation expert Joseph Vranich, from 2008 through 2015, at least 1,687 California companies moved operations out of the state.

Toyota shifted its U.S. headquarters and thousands of jobs from Torrance to Dallas, while global oil giant Occidental Petroleum moved its corporate HQ from Los Angeles to Houston, reports IBD.

The state is also losing residents as middle class workers pull up stakes to follow the jobs out of state. California lost more than 1 million middle-class residents, representing a net loss of about $26 billion in annual income, from 2004 to 2013, according to IRS data. The American Legislative Exchange Council’s “Rich State, Poor State” report has also ranked California close to last in both economic freedom and competitiveness for nine straight years.

In January, rumors that California was seeking to secede from the union gained steam as a petition circulated in an attempt to get an “independence measure” on the 2018 statewide ballot.