Saturday, March 12, 2016

Carl's Jr Says Sayonara To California; Hello, Tennesse -- March 12, 2016

I think this is an old story. In fact, it is. This was posted on the blog back in July, 2014 and a related post in September, 2014.

Investor's Business Daily has an opinion piece on this story:
To hear Hillary Clinton and Bernie Sanders, you’d think that taxes can go up to 60% or even 80%, and businesses and investors will just … pay up. But the growing number of businesses stampeding out of high tax areas suggest that they’re very wrong.
We got more evidence of that this week when CKE Restaurants, the corporate parent of Hardee’s and Carl’s Jr. restaurants, announced that they are relocating to Nashville, Tennessee.
Hardee’s will move its headquarters from St. Louis, Missouri, to Nashville, Tennessee, one of America’s fastest growing states.
Oh, and did we mention that the state has no personal income tax?
Meanwhile, the Carl’s Jr. move puts more egg on the face of California and the political class in Sacramento. Hamburger fast food chain Carl’s Jr. was founded in California and for years has been headquartered in Carpinteria, California. The highest income tax rate in California is 13%, so moving to Tennessee, where the tax rate is zero, will save the company millions of dollars on taxes a year.
Yes, we know that CKE’s official line is that the firm is relocating because it has less need for office space as it consolidates operations. But the company executives say this with a wink. Tax savings are a big factor, as is the stifling regulatory environment on the left coast, where businesses are treated like villains and rich people as cash dispensers for big government programs.
It’s not a coincidence that CKE’s CEO Andy Puzder has been one of the leading critics of high taxes and onerous rules in Washington D.C. and Sacramento.
The state legislative group ALEC finds in its latest “Rich States, Poor States” rating of the states on business climate that California ranks 44th of all the states in business competitiveness. 
California has lost roughly 9,000 companies over the last decade, with most of them moving to Texas, Florida, and Tennessee. Last year, in a major loss, Toyota moved its North American headquarters from the Golden State to North Texas.
Thanks to its high taxes and burdensome regulations, California’s hemorrhage of jobs and businesses won’t end soon.
Burger King recently relocated its headquarters out of the U.S. completely in favor of Canada, where the business tax rate is only about half what it is in America. Dozens of others have left through “inversions” to cut their tax burden.
I see the results of those business moves from California to Texas every day. The amount of highway construction and huge warehouses being built on the north side of the DFW airport.

George hangs his hat in Tennessee for other reasons:

All My Ex's Live in Texas, George Strait

Meanwhile, it isn't much better in the Pacific Northwest, where perhaps the highest concentration of CAVE dwellers live.

US regulators have rejected a huge LNG export terminal which was to be sited in Oregon.
U.S. regulators rejected Veresen Inc.’s multibillion-dollar proposal to build a terminal in Oregon that would export as many as two tankers of natural gas a week. They also denied its plan to a build a pipeline with Williams Partners LP to supply gas to the terminal.
Williams and Veresen failed to demonstrate that the pipeline’s benefits would outweigh the “adverse effects on landowners,” the Federal Energy Regulatory Commission said Friday in an order denying authorization. And without a pipeline supplying gas, the Jordan Cove export terminal “can provide no benefit to the public to counterbalance” the impacts associated with its construction, the agency said.
The rejection throws into question the future of a project that has waited almost three years for regulatory approval. A worldwide glut of liquefied natural gas is meanwhile emerging, threatening the economics of such export terminals in the U.S. As much as half of the nation’s LNG export capacity is at risk of being shut between 2017 and 2020, according to the research and consulting group Wood Mackenzie Ltd.
As I told a reader:
Personally, I'm getting tired of these pipeline companies and terminal operators trying to do business along the West Coast. There is more than enough willing operators and landowners along Texas and Louisiana Coast to build all the export facilities needed.
The Panama Canal is being widened; adds a couple days to the voyage and cost of fees through the canal, but it's probably a lot cheaper in the long run trying to fight CAVE dwellers in the Pacific Northwest. 

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