“You may all go to hell. I will go to Texas.” —Davy Crockett
When news first broke that Elon Musk might be moving to Texas, most of the coverage was very “TMZ,” as one of my editors here said. People are often interesting (especially when their name begins with “Elon” and ends with “Musk”), but ideas are what we try to focus on at CleanTechnica.
Now that it’s confirmed Elon Musk “moving”*, and both Tesla and SpaceX have a growing presence in the state, I think it’s a good idea to give readers a more realistic idea of what moving to Texas means, and perhaps more importantly, what it doesn’t mean. I was born in Texas and have spent most of my life in or very near the state, so I can give you some good information. It’s eventually going to have a large effect on Tesla as a company, and likely the clean energy industry/movement as a whole. The better that readers understand the myth and the reality of Texas, the better we can see where things are going. (*Editor’s note: Elon already spent much time in Texas for years due to SpaceX, and he has given up owning homes, so it’s not even fully clear what is different other than that he will be spending even more time there as Giga Texas is developed — as one would expect. And his official personal residence will presumably be somewhere in Texas, but he will surely still spend much time in California and elsewhere depending on work needs.)
Even if you want to focus on Elon Musk personally, knowing what the real situation with Texas is sort of dispels the “Space Karen” thing.
Let’s start with this Tweet by Governor Greg Abbott:
Elon Musk reportedly told friends he plans to move to Texas.
Texas is the best state for business.
Texas has no state income tax, while California’s is the highest in the country.
It just got better because Texas made an income tax unconstitutional.
— Greg Abbott (@GregAbbott_TX) December 5, 2020
Most of what the governor is saying here is true, but it’s not the whole truth. What this tweet does is give us a great example of the common myth of Texas. Texas is the “wild west.” Taxes are low, there are completely unregulated guns everywhere, and if you want to do business, it’s so business friendly that the Ferengi would be jealous. The state’s full of cowboys, and oil is king. It’s not a place for “city slickers” and people with thin skin. In short, it’s a conservative paradise.
None of this is really true, though.
Let’s start with taxes. Yes, it’s true that Texas has no income tax, and for services there is no sales tax, but that’s not the whole truth.
My grandfather spent most of his life in El Paso. He grew up there, and had lived plenty of other places, but loved Texas and loved El Paso. When I was a kid he taught me the phrase, “Turn two letters around and Texas becomes Taxes.” Sure, he had no income tax, but he owned three houses. One, he lived in, and the other two, he rented out. Property taxes were so high that he’d have to take most of the rental income from one of the houses to pay the property taxes for the other two. As a retiree with limited income, he felt the hurt every time the taxes would go up, and he was constantly having to fight the appraisers to keep them from valuing his houses above what they’d actually sell for.
Sources differ on how Texas ranks here. Some say it’s got the third highest property taxes in the US. Others say Texas is either #4 or #7. Either way, the state is solidly among the top ten.
While property taxes may appear to be progressive at first glance, the costs always end up being paid in a regressive way. Take my grandfather for example. When a tax hike came along, he couldn’t cut his already limited retirement budget to make up for it, so the costs would end up resulting in rent increases for the tenants. There was no choice.
Texas’ property taxes are so high to make up for the lack of revenue from income taxes, low sales taxes, and other revenues being limited. After all, you still have to pay the police, pay teachers, fund roads and bridges, etc.
From 2011–2016, I was a Texas concealed handgun license instructor. I had to spend a week in Austin learning the ins and outs of Texas gun laws. I’m also an instructor in several other states, so I can give you a pretty good idea how their laws compare to more “blue” states like New Mexico.
The fact is, Texas is comparatively restrictive. Until fairly recently, it was illegal to carry a pistol openly in a holster in Texas. Even when that changed, a license is still required. You’ll also see “30.07 signs” all over the place, which prohibit licensed people openly carrying from entering a property. You generally see fewer 30.06 (often pronounced “thirty ought six” like the common rifle round) signs, but they’re not uncommon.
In New Mexico, one can carry a handgun openly without a license, and very few places prohibit that (the big exception being places that sell liquor, but that’s a state law requirement, not the choice of the owner). In Arizona, one can carry a handgun openly or concealed without a license at all. This is known as “Constitutional Carry.”
In fact, at least 15 states are less restrictive than Texas, allowing the carry of handguns without a license (assuming federal law doesn’t prohibit ownership, so felons and other possibly dangerous people are still out even in those states). Yes, Texas is less restrictive than places like California, New York City, or Washington, D.C., but it is far from the most gun friendly “wild west” state there is.
This doesn’t really directly affect Tesla, as the company is very unlikely to allow employees and visitors to carry guns on the property (aside from security personnel), but it does show that the “wild west” mythology just isn’t true, and wouldn’t attract anyone who looks seriously at the situation before moving a residence or business there.
Texas Has Big Cities That Vote Blue
FiveThirtyEight has a good analysis of the real situation in Texas. In 2018, Beto O’Rourke came within 3 percentage points of beating Ted Cruz, which, considering the mythology, makes that a razor-thin margin. Both inside Texas and outside, people were shocked that a progressive Democrat could come so close to winning a statewide race against a well known conservative senator — one that was even one of the final contestants for the presidential nomination back in 2016.
Why? Because Texas has big cities that tend to vote for Democrats, and they’re growing. The link in the last paragraph has a good map showing that the state was mostly red for the 2018 midterm election, but the Dallas-Fort Worth metroplex, Houston, Austin, San Antonio, El Paso, and most border counties voted the other way.
Texas is now considered a “swing state” by some, and that trend shows no sign of stopping any time soon.
Business Friendliness Is A Balance
The things that make a state business friendly can turn around and bite a state in the rear when not done in moderation.
D Magazine has a good piece from 2017 explaining the problems Texas is having attracting business to the state. Lower taxes, less regulation, and other conservative tenets are good for business, but without infrastructure, transit, and other things workforces rely on, larger businesses end up choosing other places to set up shop. The key seems to be finding a balance that eases burdens, but doesn’t create new burdens, and Texas isn’t terribly good at that.
There are times that Texas conservatives let their religious zealots run amok and do things that chase away businesses, too. One great example was attempts at passing anti-transgender “bathroom bills” in recent years. There’s no evidence that transgender women are a danger to other women in bathrooms, but at the same time, the Texas bills would have forced transgender men (many of whom have beards after taking testosterone treatments) into women’s bathrooms, creating awkwardness for all involved.
Either way, Texas businesses and others considering moving to the state didn’t want to be forced to play the role of “bathroom police” and certainly didn’t want to violate the civil rights and privacy of their customers. The bills didn’t pass, but they did manage to scare a number of big businesses out of the state.
After failing both at being business friendly and failing to not frighten business away, Texas is changing. Nobody is going to entertain a “bathroom bill” again after what happened last time. Moderate Republicans and even mildly far right Republicans know that they have to keep the religious zealots in check because the state can’t afford the reputational hit. Local governments, especially in blue cities like Austin, are getting smarter at creating good incentives to attract businesses and jobs with a good balance.
If anything, their business friendliness is improving because they’re abandoning far right beliefs in favor of intelligent moderation.
What Does This Mean For Tesla?
Like many other companies, Tesla is increasing operations in the state, despite the myths not being very true. Elon Musk is also moving his legal residency to the state, but a person with that kind of money can set up a house almost anywhere and get that state’s driver’s license. In fact, many RV owners set up an address at an RV park without having any real connection to the state. Even if he’s really moved beyond legalities, it doesn’t mean he’s a wannabe cowboy or militia man now.
At the end of the day, believing the myths about Texas gives an unrealistic view of the real situation. Moving to Texas, or moving/expanding a business there doesn’t really mean anything political. Taxes may be lower in some ways, but far higher in others, so it’s not a shelter for people who don’t want to pay their “fair share.” It’s not the wild west, or a conservative paradise, so it doesn’t even tell us much about the entity’s values. Elon Musk isn’t “Space Karen” and Tesla isn’t becoming a cowboy truck company.
The only thing we can really glean from the exodus of companies from California to Texas is that California is changing relative to Texas. It would probably take a series of articles to go through all of the reasons, but Texas is shifting blue while California shifts blue faster. That says a lot more about California than the entities moving away or the places they’re moving to.
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