WSJ Editor Checks Out of the Hotel California

The Wall Street Journal ran an op-ed this weekend entitled, “California Getaway: High taxes continue to drive businesses out of state,” about how the California State Automobile Association (CSAA) is relocating three call centres to other states.

However, the CSAA, an affiliate of the American Automobile Association, is not really a “business”. I assume that, as a non-profit organization, it pays no corporate tax. Even California’s state sales tax features an exemption for non-profits. Therefore, I am highly skeptical of the claim that the CSAA is moving call centres to avoid allegedly high taxes.

The CSAA spokeswoman quoted does not mention taxes or regulations. Instead, she cites the generally high cost of doing business in California, which undoubtedly reflects the fact that it is a prosperous state with nice weather where many people and businesses choose to locate themselves and buy things.

If any blog readers can educate me on what kind of “high taxes” these call centres might have faced in California (payroll taxes, perhaps?), please post a comment below. This op-ed does not offer any examples.

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