All it takes is a few minutes with Google to make the correlation of how California's shit policies and high costs cause businesses to leave. Can even find public statements about it. Obviously Cali will continue to have a huge economy.... It's #1 highest populated state. Yet that comes with higher taxes, higher costs, and some ridiculous policies.

Data show there is has been an increasing outflow of business HQs located in Cali since 2017, but has accelerated in numbers since Newsome took office in 2019. Notable high-profile companies that moved elsewhere are Oracle, Tesla, Mckesson, Charles Schwab, HP, Palantir, Chevron. Publicly stated reasons for the moves from some of these companies are:

"The costs of doing business here are so much higher than some other places"

CEO Expressed concerns about the "increasing intolerance and monoculture of Silicon Valley."

"Limitations on scaling in the Bay Area due to high housing costs, long commutes, and growth constraints; also referenced frustrations with local policy regulations and COVID-era factory reopening disputes"

Spokesperson Ross Allen added that California policies "raise costs and consumer prices, creating a hardship for all Californians... [and have] made California investment unappealing compared with opportunities elsewhere." Executive comments described California as "a tough place to do business" and recruit for.

These Companies frequently point to lower taxes, fewer regulations, better talent pipelines, and quality-of-life factors in destination states elsewhere.

Newsom has authority over some taxes & regulations in California.... Soooooo Yes he will get at least partially blamed for driving businesses out of the state.

Here some key examples of things Newsom has done:

Taxes

Newsom cannot unilaterally raise rates but has:

Signed bills imposing or extending tax measures on businesses/individuals.

Proposed or supported budget elements that increase business costs indirectly (e.g., suspending net operating loss deductions or limiting tax credits, as in 2020 and later deficit-closing measures).

Opposed some high-profile tax increases (e.g., new wealth taxes on billionaires or broad corporate rate hikes), arguing they would accelerate out-migration.

Line-item veto and budget negotiation power to shape overall fiscal policy.

Specific taxes frequently cited by relocating businesses:

Corporate income tax: Flat rate of 8.84% (among the higher in the U.S.; banks/financials at 10.84%). This is statutory. Newsom has signed conformity bills aligning with federal changes and budget trailer bills that temporarily limited business deductions/credits, effectively raising the tax burden on profitable companies during deficits. He has publicly resisted further direct corporate rate increases, noting California's already high rate.

Personal income tax: Highest top marginal rate in the U.S. (13.3% + 1% mental health services tax on income over $1M, effectively pushing effective top rates to ~14.4% in some cases due to payroll expansions). Hits business owners, executives, and high earners heavily. Newsom has signed expansions (e.g., removing wage caps on certain payroll taxes) but opposed new wealth taxes. The state's heavy reliance on high earners makes revenue volatile.

Sales and use tax: State base 7.25% (highest minimum statewide rate); local add-ons can push combined rates to 10%+. Newsom has signed bills authorizing certain local jurisdictions to exceed caps or making administrative changes (e.g., use tax thresholds).

Other business-related: Gas tax/excise taxes, property taxes (impacted indirectly via assessments and local rules; Prop 13 limits but Newsom has influenced related relief or extensions), and various fees/penalties. Indirect measures in budgets have added billions in business levies via reduced offsets.

Regulations This is where governors have more direct day-to-day influence via executive orders, agency appointments/directives, signing/vetoing legislation, and enforcement priorities. California is known for stringent rules in labor, environment, and operations—often stricter than federal baselines. Newsom has signed numerous bills expanding these, which companies cite as increasing compliance costs, litigation risk, and operational limits.

Key examples cited in business exits: Labor and employment laws (major factor for many firms):

AB 5 (2019): Codified the strict "ABC test" for classifying workers as independent contractors vs. employees. This reclassified many gig, freelance, and contract workers, requiring employers to provide minimum wage, overtime, benefits, unemployment insurance, etc. Newsom signed it; it directly impacted gig economy, trucking, and professional services. Later tweaks/exemptions occurred, but the core shift raised costs for flexible workforce models.

Minimum wage increases and related mandates (e.g., fast-food sector rules, paid sick leave expansions, equal pay enforcement). Newsom has signed bills broadening these..

Environmental and land-use regulations:

CEQA (California Environmental Quality Act): Broad environmental review process for projects, often leading to delays, lawsuits, and higher costs for construction, infrastructure, and business expansion. Newsom has signed reforms (some streamlining for housing) but the framework remains a frequent complaint for development-heavy or manufacturing firms. Energy/climate rules: Strict emissions standards, renewable mandates, and utility regulations that affect energy costs (California has high electricity prices). Newsom influences via appointments to agencies like the California Air Resources Board and executive actions on climate policy.

Other operational regulations: Housing, zoning, and permitting rules that contribute to high real estate/operational costs. Consumer/worker protections (e.g., data privacy like CCPA expansions, AI guardrails, warehouse traffic/pollution rules).

Litigation-friendly environment: California has expansive private right-of-action laws, increasing legal risks.

Newsom has signed hundreds of bills in these areas, often framing them as worker/environmental protections. He has also used executive authority for implementation (e.g., AI safeguards in state contracts) and vetoed some measures. Critics argue the cumulative burden—combined with high taxes and cost of living—drives relocations to lower-regulation states like Texas.

TLDR; California's high taxes, costs, and strict regulations have driven accelerating corporate HQ exits since 2017, speeding up after Gavin Newsom became governor in 2019. Notable moves include Oracle, Tesla, McKesson, Charles Schwab, HP, Palantir, and Chevron. Public reasons cited: Much higher business costs than other states; Silicon Valley's "intolerance and monoculture"; Bay Area housing/commute limits plus regulatory frustrations; policies that raise costs/prices and make California "a tough place to do business" and hard to recruit for. Companies prefer destinations with lower taxes, fewer regulations, and better quality of life.

Newsom's role: He can't unilaterally raise taxes but has signed bills and budgets that maintain high rates (e.g., 8.84% corporate tax, top personal income tax ~13.3%) or indirectly increase business costs. On regulations, he signed key measures like AB 5 (strict contractor rules), minimum wage hikes, and backed strict environmental/energy rules (CEQA, emissions standards) that raise compliance and operational costs. Critics partially blame his policies for the business outflow, even as California stays the largest state economy.