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# Dancing the Texas Two-Step
May 01 2014
Written by Paul Hatfield.
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***PERSPECTIVE***-There’s going to be some serious dancing down in Plano, Texas over the next two years as **Toyota** relocates 3,000 jobs from **Torrance, California** and another 1,000 from other locations.
[Two-stepping](https://www.youtube.com/watch?v=sbGMoyqYSsg) away from California will result in serious tax savings for the automotive giant employees who choose to make the move, ranging from a few thousand to over $10,000 per year. Add that up over a lifetime and you have a basis for sound retirement income.
No personal income tax for Texans. Property tax rates are higher in Texas than in California, but housing costs are less in the Lone Star state, so actual property taxes could be lower for homeowners there.
The sales tax rate in Plano is 8.25% vs 9.0% in Los Angeles and Torrance, but there are measures on the horizon that could increase the rate for the latter two cities up to 10%.
Toyota downplayed the cost incentives for making the move, [alluding to the potential synergy and efficiency](http://www.newswise.com/articles/toyota-to-texas-move-spotlights-big-trucks-bolder-marketing) of Plano’s proximity to the company’s manufacturing sites. But the numbers speak for themselves – there are no corporate taxes in Texas and Governor Rick Perry offered $40 million to Toyota to make the move. The payout will be more than recouped by sales tax generated by 3,000 employees whose aggregate earnings must be close to $200 million, and by the multiplier effect of their spending.
[California was never on the radar scope](http://www.chicagotribune.com/classified/automotive/sns-rt-us-autos-toyota-motor-texas-move-20140428,0,6707429.story) for Toyota’s change of base. That speaks volumes. It could have been a different story if California had been an attractive location for Toyota’s truck manufacturing plant, constructed in San Antonio in 2004. California wasn’t even on the list of states considered.
Local politicians here in Los Angeles are more interested in a failing strategy to keep film productions here knowing full well our labor costs are much higher. They need to make the region and the state more attractive to manufacturing facilities that offer good middle-class jobs. Manufacturing attracts high-paying white collar jobs, too – accounting, information technology and other back office career opportunities. Instead, our City Council always opens the check book to hotel developers and the low-paying hospitality industry jobs they offer.
How many Toyota employees will make the move to Plano remains to be seen, but those who decide to stay will have an uphill climb in finding comparable jobs in Southern California. I suppose they can work the registration desk at a 5-star hotel in downtown.
***(Paul Hatfield is a CPA* ***and former NC Valley Village board member and treasurer******. He blogs at Village to Village and contributes to CityWatch. He can be reached at:* *)***
**–cw**
**CityWatch**
**Vol 12 Issue 36**
**Pub: May 2, 2014**
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