Texas has experienced an economic boom in recent years, the growth rates of gross domestic product (GDP) considerably exceeding the American average, while a series of large companies have announced that they move their headquarters or invest massively in the Lone Star State.
Talk to Newsweek, Several experts in the Texan economy or policy have mainly awarded this to the low tax regulations and adapted to businesses. However, two warned that there could be a future confrontation between the interests of companies and the social conservatism of Texas Republicans who control the two chambers of the State Legislative Assembly as well as the Governor’s office.
Commercial investment
On February 18, KFC, the fast food giant, formerly known as Kentucky Fried Chicken, became the last company to announce that they are Move their headquarters from Louisville, Kentucky, Texas Choose Plano, a city on the northern outskirts of Dallas. Talk to Newsweek, David Gibbs, Managing Director of the parent company of KFC, Yum! The brands, said that this decision “would position us for sustainable growth” and “would help us to better serve our customers, our employees, our franchisees and our shareholders”.
Earlier in February, the Realtor.com real estate registration website announced that it was Transfer its headquarters From Santa Clara, California, Austin, with the company saying Nowsweek The city would become “its upper hiring location”.
In July 2024, billionaire Elon Musk announced that he was moving the siege of X, formerly TwitterAnd Spacex in Texas in response to the Governor of California Gavin Newsom Approving a decision that prevented teachers from informing him of parents if their children modify their gender identity.
In a post X, Musk wrote: “It is the final straw. Because of this law and many others that preceded it, attacker both families and businesses, SpaceX will now move his Hawthorne QG, California, Starbase, Texas.”
Musk is now a close ally of the president Donald Trump And leads the recently trained government ministry (DOGE).
The financial services company, Charles Schwab Corp., was based in San Francisco until 2021, when it moved its head office to Westlake, Texas. In August 2024, the oil giant Chevron announced that he was moving his headquarters from San Ramon, California, Houston.
Earlier this month, Apple announced that it would build a new manufacturing plant of 250,000 square feet in Houston to support its “personal intelligence system” as part of a wider investment of $ 500 billion in the United States
The abundant land of Texas and relatively cheap energy have also made a promoted location for large data centers used to supply artificial intelligence (AI). In January, Trump announced Stargate, a combined company of $ 500 billion involving OPENAIOracle and SoftBank, which will be centered around the Solitaire Star State.
Texas planned to be the largest American state by 2045
According to figures from the Texas Controller Bureau in 2024, the Texan economy increased by 4.8%, the double of the 2.4% that the data from the trade department was obtained by the nation as a whole.
The figures from the American census office show that between July 2023 and July 2024, the population of Texas increased by 562,941, with new residents attracted by the availability of labor and low taxation. This gave Texas an annualized growth rate of 1.8%, the third higher in the United States behind Florida and the Columbia district.
A report published by Realtor.com in February concluded that in 2045, the population of Texas will have increased by 35% to 42 million, against 31 million current, and would replace California as the Most populous state.
Photo-illustration by Newsweek / Getty
Taxation and regulation
Texas is only one of the nine states in the United States which do not charge any income tax On individuals or companies below a certain income ceiling, while its corporate tax rate is low and falls to zero for companies below a certain threshold.
According to a 2024 study published by Realtor.com, Texas represented 15% of the new housing permits issued in the United States, although it represents only 9% of its population, helping to maintain prices and rents relatively cheap despite the rapid influx of people.
Professor Benjamin Powell, an economist who teaches Texas Tech University, awarded the flourishing economy of the State at a relatively low cost of living, to low taxes and less strict regulations.
“Companies flee high tax, high regulation, high cost states such as California, New York and Illinois,” he said Nowsweek. “They are attracted to Texas because we have lower taxes and regulations, and their workers are faced at a lower cost of living here than in these other states.”
Professor Jon Taylor, an expert in state policy who teaches at the University of Texas in San Antonio, agrees with this evaluation, telling Nowsweek: “The governor regularly preaches that societies move or strengthen new capacities tell you that it is because of the so-called Texas Miracle ”, which stimulates perceptions that we are a friendly state.
He continued: “We can wrap the usual chips on a solid economy without state income tax, relatively minimal commercial regulations (in particular for limited liability companies), a boom in booming talents has created a certain number of world -class research universities, and a leader in energy, space exploration, artificial intelligence and developing technology facilities.
Joshua Blank, who directs Texas Politics Project at the University of Texas in Austin, said Nowsweek: “Texas politicians are quite consistent and aggressive about the Texas brand as a pro-business state. And after more than 20 years Republican Control, rhetoric has been followed with years of legislative and executive actions which are directly intended to be friendly in business. “”
In a declaration provided to Newsweek, Andrew Mahaleris, Governor of Texas Greg AbbottThe press secretary, said: “Companies continue to move here because in Texas, we move at business speed by reducing administrative formalities and protecting the industry from severe restrictions of employment killers and unnecessary regulations that can hang innovators elsewhere.
“Texas is the 8th largest economy in the world and the nation’s economic engine, leading all states for jobs added in the past 12 months (…)
“Texas remains number one because people and businesses choose our state rather than for others for the unrivaled competitive advantages that we offer: no taxes on companies or on companies, a predictable regulatory climate and a young, qualified, diversified and growing workforce.”
Political concerns
Taylor warned against an upcoming potential confrontation between the values of companies moving to Texas for commercial reasons and the social conservatism of the State.
Referring to the states that made the step, he said: “The question is whether they are comfortable going to Texas and investing long -term problems such as draconian laws of choice of state reproduction, the limits of accessibility to vote, the dismantling of diversity, equity and immigration policies.”
This question was also raised by Blank, although it is more optimistic about the result.
“While more and more companies, and in particular more high-tech companies, are moving to Texas, this raises the question of whether the conservative policy of Texas will come up against a potentially less conservative workforce,” he said. “So far, Texas policy has not led companies to reconsider their decisions, and that does not seem likely in the future.”
Powell said many of those who move to Texas actually share the dominant values of the state.
“Some Texans fear that these interstate migrants will bring their liberal values and their policy to Texas, but the reverse seems to be the case,” he said. “Californians leaving for Texas often share more political values with Texans than with other Californians.”