By Reagan Steele – Business & Economic Policy Writer

California’s long-running corporate exodus just got more ironic. The very company that tracks businesses leaving the state has packed up its own headquarters and joined the migration.

CBRE Group, the world’s largest commercial real estate services firm, moved its headquarters from Los Angeles to Dallas in 2020. For years the firm had documented the steady stream of companies fleeing high costs and heavy-handed rules in the Golden State. Then it followed them out the door.

The list of other major departures reads like a roll call of American industry. Chevron shifted its headquarters from San Ramon to Houston in 2024. Tesla left Palo Alto for Austin in 2021. Oracle headed from Silicon Valley to Austin in 2020. Charles Schwab relocated from San Francisco to the Dallas area. Palantir moved to Denver. Yamaha, Neutrogena, Public Storage and dozens more have made similar jumps in recent years.

Data from the Public Policy Institute of California shows that between 147 and 213 companies relocated their headquarters out of the state each year from 2011 to 2021, with the pace picking up as frustrations mounted. Hundreds of headquarters have left over the past decade, taking thousands of jobs with them. Many landed in lower-tax, lighter-regulated states such as Texas, Florida and Tennessee.

What is pushing them out? California’s regulatory burden tops the charts. A 2023 Mercatus Center analysis counted 420,434 regulatory restrictions in the state’s code, more than 100,000 above the next closest states. That thicket of rules covers everything from environmental mandates to labor requirements and adds up to over 23 million words of compliance headaches.

Taxes pile on top of that weight. California levies the nation’s highest marginal income tax rate at 13.3 percent, with additional surcharges pushing the effective top rate even higher for high earners. Corporate taxes and other levies compound the pain. By comparison, Florida, Tennessee and Texas charge zero state income tax, letting businesses and workers keep more of their earnings to reinvest and grow.

Business leaders and analysts point to years of progressive policies under Democratic leadership, including Gov. Gavin Newsom, as a key driver. Strict labor laws, aggressive environmental regulations and a regulatory environment described by some as the most burdensome in the country have created an atmosphere where staying put feels like a losing bet. Meanwhile, Sun Belt cities such as Dallas-Fort Worth and Austin continue to welcome new arrivals and the economic boost they bring.

Defenders of the status quo note that California still dominates in tech and entertainment. Yet the market is speaking clearly. When companies face hundreds of thousands of mandates plus the steepest tax rates in America, many decide the path forward lies elsewhere.

As more firms follow the trail blazed by the very company that once tallied their departures, one question hangs in the air. Is California the problem, or did every major company that left somehow make the same mistake? For now the exodus rolls on, a quiet verdict from the marketplace on policies that favor control over opportunity. Real growth, it turns out, still prefers freedom over red tape.