When the world’s richest man left California — taking his multitrillion electric car and space companies with him — the Golden State lost out on billions of dollars in economic benefits.
Elon Musk’s SpaceX launched its record-breaking IPO on Friday, making him the world’s first trillionaire while enriching many employees and investors.
Musk didn’t travel to the New York Stock Exchange for the ceremonial bell ringing, instead choosing to celebrate at his company’s headquarters in South Texas — surrounded by some of the estimated 4,000 millionaires he created through the public offering.
It was a symbolic move for Musk, who’s relocation of SpaceX and Tesla to the Lone Star State cost California untold billions, said Dr. Wayne Winegarden of the Pacific Research Institute.
“The bottom line is this is exhibit A of why you don’t want to chase away businesses,” he told The California Post.
“Obviously, businesses will move [because of] different advantages and things of that nature. But when you have a punitive tax system, when you have a punitive energy cost, you chase away companies, and entrepreneurial and potential income gains go with it,” Winegarden added.
“There are all sorts of prosperity implications from that.”
Musk left the state personally in 2020 to oversee Tesla’s new headquarters being built in Texas. Tesla officially relocated to Austin in 2021.
The tech tycoon said at the time that he left California because it had become too “complacent” for businesspeople.
“They do tend to get a little complacent, a little entitled, and then they don’t win the championship anymore,” he said.
Gov. Gavin Newsom had expressed confidence that Musk would stay at the start of the COVID-19 pandemic, saying he was “not worried about Elon leaving any time soon.”
Musk did walk away — and Texas welcomed him with open arms.
“Texas loves jobs & we’re very glad to have you as a Texan,” Sen. Ted Cruz wrote in December 2020.
In 2024, Musk cited a California law banning school districts from requiring parents to be notified of a change in their child’s gender identification as the “final straw” in his frayed relationship with the state.
“Because of this law and the many others that preceded it, attacking both families and companies, SpaceX will now move its HQ from Hawthorne, California, to Starbase, Texas,” he wrote on X.
“I did make it clear to Governor Newsom about a year ago that laws of this nature would force families and companies to leave California to protect their children,” he added.
His social media company, X, followed suit, closing its headquarters in San Francisco and heading for Texas.
While California is still a prime place to do business, Winegarden said, the cost of doing so needs to drop to attract more money.
The state “needs to reduce the burden of taxation, lower regulatory costs… stop threatening businesses,” he said.
Many SpaceX employees still live in the Golden State — meaning their profits from the company’s stock market debut are subject to state taxes — but their tax dollars are only a fraction of what California could have had.
“You do have a footprint of all of these companies that are still there, but you’ve lost some of the expansion, you’ve lost Musk’s income, people that went with him,” he said.
“[California] lost a lot.”
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