Toyota’s Tax Exodus Sends Shockwaves Through Job-Impoverished California

Toyota’s decision this week to leave Torrance, California, for the pro-business environs of Plano, Texas, sent shockwaves through the Southern California community where Toyota employs more than five percent of the workforce. According to MSN Money, the move brings to mind Nissan’s decision eight years ago to move 1,300 jobs to the no-income tax state of Tennessee. A former Nissan executive recalled how the move equated to the company’s employees “getting a 20-percent raise.”

According to the 2013 City of Torrance’sComprehensive Annual Report, the city stands to lose more than $473 million in property taxes. Plus, just over a year ago, Moody’s downgraded Torrance’s credit rating, citing a weakened general fund and increasing public expenditures.


Toyota’s Torrance-based employees would benefit from doing their own calculation of how a move to Texas could affect their personal income. Financial planner and fellow columnist Robert W. Wood lays out ascenario that shows how some workers potentially could save more than a million dollars over a lifetime. The innovative automaker Tesla surely must be taking this into account when deciding which state offers the best opportunities for its new battery factory. Right now, California is in the running for the new plant, but so are several no-income tax states.

And it is not as if California’s anti-business tactics are a well-kept secret.

Workers and employers in my own home state of Missouri may soon benefit from income tax cutting legislation that was passed this session. Unfortunately, while other states are working hard to limit taxes that are harmful to employees and job creators, Missouri Governor Jay Nixon has said that he will veto the pro-growth, pro-worker, pro-employer bill that would reduce Missouri’s personal income tax for the first time in nearly a century. Taxpayers in Missouri and across the country would do well to let their elected officials know that they do not want to go down the same path as California.