We're still trying to settle on a name for the new "Rust Belt" for blue states, where high taxes, de-growth climate policies, permitting paralysis, and an obsession with woke governance have sparked a historic outflow of people, businesses, and capital to red states.
The old Rust Belt was hollowed out by decades of deindustrialization. This new version in blue states is being hollowed out by self-inflicted progressive policy failures after policy failures after policy failures.
The latest, and one of the most abrupt examples, is South Korean tech giant Samsung Electronics shifting its U.S. headquarters from lefty-controlled New Jersey to red-state Texas, which is governed by common sense.
"Samsung Electronics America Inc. is undergoing a business transformation designed to better position our organization for long-term growth and future success. As part of this effort, we are relocating our U.S. headquarters from New Jersey to our existing campus in Plano, Texas, building on our 30-year presence in the state," the company said in a statement. "The transition, which will be completed by the end of the year, is intended to strengthen alignment across teams and offices, and sharpen our focus on the areas that will drive the greatest impact for our customers, partners, and business."
The statement by the memory chip giant did not explain why they're relocating their US headquarters. But we can only guess what it came down to: an unfavorable business environment.
New Jersey has one of the highest corporate tax burdens in the US, coming in at 9% for companies with more than $100,000 in total net income. Smaller companies pay lower rates of 7.5% or 6.5%, depending on income.
For mega corporations, the rate can be even higher. New Jersey added a 2.5% Corporate Transit Fee on businesses with more than $10 million in taxable net income allocated to the state, bringing the effective top rate to 11.5% for those companies.
Samsung's decision was most likely rooted in Texas' long-standing policy of no corporate income tax.
"Imagine turning on the morning news in Texas and watching them celebrate jobs leaving New Jersey," NJ Assembly GOP wrote on X earlier today, adding, "The numbers are damning: New Jersey has the highest corporate tax rate in the nation. Texas has no corporate income tax. We've introduced the fixes. Democrats blocked everyone. Texas gets the jobs. New Jersey gets to keep old ribbon-cutting photos."
Another X user noted, "Whether it's Samsung, Mercedes-Benz, Hertz, ExxonMobil, or other major employers, the message is becoming impossible to ignore: businesses are voting with their feet. And, the Democrats in the State House are not making it any easier for businesses - the legislation or administrative rules as of late has been so anti-business."
What is significant here is that Samsung opened its headquarters in New Jersey only eight months ago, suggesting that the state's political and economic environment has deteriorated since.
Last month, The Economist published an article titled "Texas Is Becoming America Inc.'s Center of Gravity," pointing out that corporations are voting with their feet and fleeing blue states.
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Democrats have zero self-awareness that their state-killing policies are only pushing people, companies, and money to red states.