Why do companies choose to move to one city as opposed to another? The same reason you would—MONEY. And just like you and I would, companies want to go where they’re most welcome.
If either of these makes a company like Apple bad, then I don’t know what’s good.
As both an investor and an investment advisor, I’m glad that Apple will finally leave (at least in part) the state of California. Any mismanaged state that is keeping down the price or dividend of a stock we own ought to have to answer in this way. We should be demanding that companies we own find the most prudent pathway of providing us a return. Putting their heads in the sand and ignoring important issues like this is not what we want them to be doing.
And companies should be demanding that their home states recognize where growth comes from, that they welcome their capital and potential tax base. Companies need to demand that states make it easier to do business.
When a company like Apple takes a drastic step like this, these money-wasting politicians (firmly established on both sides of the isle, by the way) hear one message loud and clear: “We’ll no longer pay your inflated tax rates.” And if that’s what it takes to get them to listen, so be it.
Apple—that nimble giant—made just such a statement, but California wouldn’t listen. So they simply did what you and I would have done: they walked out.
In the years to come, we’ll see if Texas can remember this lesson.