As a growing number of companies plan to move or build up their operations in new states with business-friendly policies, the Job Creators Network is warning that high-tax states could face an economic contraction.
"Over the last couple of years, dozens of high-profile companies have left high-tax states like New York, New Jersey, Illinois, and California for states like Florida, Texas, and Tennesse with lower taxes and fewer regulations. For every big-name company that departs, hundreds of small businesses that people haven't heard of also move," JCN president Alfredo Ortiz told FOX Business. "As a result, economies in low-tax states are booming, while those in high-tax states are contracting."
Macaulay Porter, the press secretary for Virginia Gov. Glenn Youngkin, told FOX Business that the Commonwealth has added 80,000 jobs since his inauguration. Companies that have announced plans to move their global corporate headquarters to or build facilities in Virginia since Youngkin took office include Boeing, Raytheon Technologies, LEGO, Hamilton Insurance Group and Rocket Lab USA.
|BA||THE BOEING CO.||139.84||+3.12||+2.28%|
|RTX||RAYTHEON TECHNOLOGIES CORP.||97.02||+0.91||+0.95%|
|RKLB||ROCKET LAB USA||3.80||+0.01||+0.26%|
"Governor Youngkin's business expertise, commitment to lower the cost of living, expand job opportunities, reduce regulations, foster economic growth, and workforce development makes Virginia such a desirable place for companies," Porter said.
Meanwhile, Texas has attracted 250 new corporate headquarters, including 54 Fortune 500 companies, under Gov. Greg Abbott's leadership, with more announcements in 2021 than any other year, according to his press secretary and senior communications advisor Renae Eze.
Caterpillar recently announced plans to move its global headquarters from Deerfield, Illinois to Irving, Texas later this year. Other companies that have made the move to the Lone Star State include Tesla, Oracle and Hewlett Packard Enterprises.
|HPE||HEWLETT PACKARD ENTERPRISE CO.||12.96||-0.30||-2.26%|
"Texas remains number one because of the unmatched competitive advantages we offer: no corporate or personal income taxes, a predictable regulatory climate, and a young, growing, and skilled workforce," Eze told FOX Business. "We look forward to even more major economic announcements this year as Texas remains the economic engine of the nation."
Looking ahead, Ortiz predicts that companies moving their global headquarters will evolve into a larger trend, with Georgia, Iowa, Arizona and South Dakota expected to benefit due to their "free-market policies" in addition to Texas and Virginia.
"Policymakers should study the pro-business policies like tax cuts and deregulation implemented by states where companies are moving to and emulate them to boost economic growth and living standards," Ortiz added.
Ortiz's comments come as Bank of America Global Research strategists have ratcheted up the odds of an economic downturn to 40% in 2023, with gross domestic product – the broadest measure of goods and services produced in a nation – slowing to almost zero by the second half of next year.
More than 60% of executives expect a recession in the next 12 to 18 months, according to a survey of CEOs and other C-suite executives conducted by the Conference Board, a business research firm.
Fox Business' Megan Henney contributed to this report.