Sean Hannity emphasized that Newsom’s economic policies caused many California-based companies to either shut down or relocate to tax-friendly states, notably Florida and Texas. Hannity pointed out that the major reason that led significant businesses such as Tesla to relocate to other states was Newsom’s tax policies. Indeed, Newsom's tax policies were hostile to business operations.
In addition to the federal corporate income tax that corporations are compelled to pay, which is about 21%, California imposed an 8.84% business tax on all businesses. This led California to be ranked No. 48 out of 50 on the State Business Tax Climate Index Ranking, according to the Tax Foundation, which certainly proves that California’s tax policies are punitive and present to burden to businesses that plan on scaling their operations.
Compared to California, Florida has a 5.5% business tax and is ranked No. 4 out of 50 on the States Business Tax Climate Index Ranking, according to the Tax Foundation. More importantly, Florida does not have a top individual income tax rate while California does have a 13.3% top individual income tax rate. This means that for any person living in California and making over $500,000, which is considered by the federal government to be part of the 99th percentile (the top 1%), that person ought to pay a 37% federal income tax, then a 13.3% state tax (excluding the local tax). Thus, such a person will be forced to pay 50.3% in taxes alone before having access to his or her disposable income. This explains why many businesses and wealthy individuals left the state of California for more tax-friendlier states.
Newsom retorted that he was a business owner himself for a while before venturing into politics, and what helped him run a successful business was the regulatory framework imposed upon businesses. Moreover, the California Governor argued that states and counties with the highest GDP per capita are the Blue States with progressive economic policies. Newsom doubled-down by stating that per capita, more Floridians move to California than Californians moving to Florida. This statement is supported by U.S. Census Bureau data. The Census Bureau’s American Community Survey data show that 1.16 per 1,000 Floridians move to California in 2021, and 0.96 Californians moved to Florida that year.
This interview was a major political boon for Newsom as it reinforces his legitimacy and credibility among liberals and progressives. For liberals and progressives, the fact that he agreed to be interviewed by Hannity, who is known for his staunch conservative views, shows that he is open-minded and willing to accept his views being challenged.
For conservatives however, even if the data confirm that more Floridians per capita moved to California than the other way around, it still proves their point that his economic policies are still disastrous for California because they destroyed a lot of economic opportunities for working-class families.
Logically, speculations around Newsom’s potential candidacy for the presidency renewed. Many see Florida Gov. Ron DeSantis as Newsom’s main political opponent in the general election if Newsom were to run and eventually were to become the Democratic frontrunner. Newsom had not confirmed whether he will challenge President Biden or not. According to The Hill, while Democrats concede that he likely has higher ambitions for the White House, some members of the party are pushing back at the notion that he is running a shadow campaign.