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California's political divisions widen as Republicans, businesses want out

Half of the state’s registered voters said they have either given serious or some though to leaving the state

Political, economic fallout from California exodus

California lost 1 million residents over 10 years; William La Jeunesse reports from Los Angeles.

President Trump was fundraising in liberal-leaning California this week, as research shows Golden State Republicans are becoming increasingly agitated over the state’s economic conditions.

With Super Tuesday approaching next month, the state has 415 delegates to award – which is about three times the amount of the first four voting states combined. New Hampshire, for example, has just 24 delegates.

But one study indicates California is unlikely to turn red anytime soon.

Half of the state’s registered voters said they have either given serious or some thought to leaving the state, according to a recent survey from the University of California Berkeley’s Institute of Government Studies. And it’s Republicans and conservatives who are three times as likely to be considering leaving than their liberal and Democratic counterparts.

The top reasons for their discontent were high housing costs – a complaint felt across the political divide – followed by high taxes and the state’s political culture, which were largely cited by Republicans.

California, which has the highest income tax rates in the U.S., is already losing residents to lower-tax states.

As previously reported by FOX Business, more than 86,160 Golden State residents left for Texas in 2018, and 68,516 went to Arizona. More than 55,460 left for Washington, and more than 50,700 went to Nevada. Of those top four destinations, three have no state income tax. Arizona does, but rates are significantly lower than in California.

According to IRS data, California lost about $8 billion in 2018 thanks to the outflow of residents.

It’s not just residents, however; businesses are leaving, too.

According to a 2019 study from Chief Executive Magazine, California is the worst state for business – with Texas, a state with no income tax, attracting the highest share of California companies.

Another study showed that 660 companies moved 765 facilities out of the state in 2018 and 2019. Companies based in the state diverted $22.7 billion to offices and facilities in other states, costing California at least 145,000 jobs.

“If you’re running a profitable company the number one reason to leave California is taxes,” business relocation coach and the aforementioned study’s author Joe Vranich told Fox News. “It’s not only taxes on your business, it’s taxes on your employees that are so high that you wind up having to pay your employees more to cover for the increased taxes.”

Many experts – including those in the trucking and housing industries – have said activity in the state is constrained by burdensome regulations. Independent contractors in the trucking industry, often referred to as owner operators, are fighting in courts to be exempted from a new law that could eliminate about 70,000 trucking jobs in the state.

An exodus of people from high-tax states accelerated when discussions regarding the Tax Cuts and Jobs Act, which was signed into law in 2017, indicated that state and local tax deductions were likely to be capped at $10,000. The cap has caused pain for residents in high-tax states since it was well below the average amounts claimed by individuals. Before the cap, the average deduction claimed in California, for example, was $22,000, according to Kevin de Leon, a Democratic member of the California Senate.

According to the Berkeley IGS survey, the percentage of voters who think California is one of the best places to live declined to 50 percent as of 2019, from 78 percent in 1985. Consistent with other data researchers found, Republicans were more likely to have an unfavorable view of the state than Democrats.

Fox News’ William La Jeunesse contributed to this report.

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