Tesla’s Elon Musk ditches California for Texas. Here’s what awaits him
Tags: Elon Musk, News, California, Tesla

Elon Musk, the inventor, investor and capitalist, has called it quits on California, his home for the past 25 years. He’s gone to Texas.

As reported by FOX Business on Tuesday, “For myself, yes, I have moved to Texas,” Musk told Wall Street Journal editor in chief Matt Murray at a CEO Council Summit.“We’ve got the Starship development here in South Texas where I am right now. We’re hopefully going to do a launch later today. And then we’ve got big factory developments just outside of Austin for Giga Texas as well.”

With Tesla’s soaring stock price,Musk has become America’s (and the world’s), second-richest person.

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The move to Texas means that he will increase his chances at avoiding a 13.3% state income tax on the capital gains he takes in the event he sells Tesla stock or receives bonuses — though California’s Franchise Tax Board can be known for their relentless pursuit of income taxes across state lines. Texas has no personal income tax.

He’s not alone. What started as a trickle may become a flood.

TESLA’S ELON MUSK CONFIRMS TEXAS MOVE FROM CALIFORNIA, WARNS STATE ON EXODUS

Musk’s personal change of address follows quickly on the heels of Hewlett Packard Enterprise moving from Silicon Valley to Houston, Joe Lonsdale, like Musk, a Silicon Valley founder (Palantir and Addepar) and venture capitalist moving to Austin, and innovative millionaire podcaster Joe Rogan moving from Los Angeles to Austin.

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And, according to the U.S. Census Bureau, it isn’t just the rich and famous who are leaving California. Every year for the past 15 years, about 100,000 more Californians leave the state than other Americans move in, with the most popular destination consistently Texas, 1,300 miles to the east.

MUSK ADDS NEARLY $10B TO NET WORTH IN ONE DAY, CLOSING IN ON BEZOS, RICHEST PERSON IN THE WORLD

Commenting on California’s business climate, Musk likened the Golden State to a sports team that starts winning for so long that its players take things for granted and get complacent and entitled and “…then they don’t win the championship anymore.”

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The Tesla and SpaceX CEO noted he still has a large corporate presence in California and observed, “Tesla is the last car company still manufacturing cars in California. SpaceX is the last aerospace company still doing significant manufacturing in California.”

He then drove the point home at the Wall Street Journal CEO Council summit on Tuesday saying, “There used to be over a dozen car plants in California. And California used to be the center of aerospace manufacturing. My companies are the last two left.”

MUSK ADDS NEARLY $10B TO NET WORTH IN ONE DAY, CLOSING IN ON BEZOS, RICHEST PERSON IN WORLD

I can personally attest to Musk’s claim. I worked in California’s aerospace industry for 13 years prior to being elected to the State Assembly in 2004. By the time I termed out in 2010, the headquarters at which I consulted had vacated the state. The next year, I moved to Texas.

Tesla looked to Texas to begin building a new Gigafactory this summer, breaking ground outside of Austin in a matter of weeks. A similar effort in California would have consumed five years with millions of dollars tied up in environmental lawsuits likely brought by labor unions — a common practice known in California as “greenmail.”

Musk criticized California’s heavy regulatory climate, employing the analogy, “You have a forest of redwoods and the little trees can’t grow.” He suggested this results in government-enforced monopolies and duopolies because startups get strangled by high regulatory compliance costs.

California should “just get out of the way” of innovators, Musk said.

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Texas Gov. Greg Abbott frequently tells businesses about the benefits of moving to Texas. Business relocation experts say firms can save about 32% of their operating costs by moving out of California to Texas, largely due to tax and regulatory savings, but also lower energy costs, land costs, and housing costs for employees.

Last May, Musk threatened to move Tesla out of California in a dust-up over conflicting COVID-19 restrictions that shut down Tesla’s factory in Fremont in the San Francisco Bay area. Musk called the health orders “fascist” and said the stay-at-home orders were “forcibly imprisoning people in their homes.”

Soon after, Democrat San Diego California State Assemblymember Lorena Gonzalez tweeted “F*ck Elon Musk.”

In Musk’s move to Texas, he appears to not only be getting the last word but also following in the footsteps of one of the most famous early Texans, Davy Crockett, who after losing his reelection campaign for Congress in 1834 said: “…you may all go to hell and I will go to Texas.”

Musk might add today, “And save hundreds of millions on my income taxes.”

Chuck DeVore is Vice President of National Initiatives for the Texas Public Policy Foundation, he served as a California State Assemblyman from 2004 to 2010 and is a lieutenant colonel in the U.S. Army Retired Reserve.