Another California CEO Blasts ‘Sucks’ State Taxes as Company Flee to Texas

‘It Doesn’t Work. It Doesn’t Make Sense. It’s Too Hard’: A CEO’s Blunt Words Fuel California Exodus

‘Doing business in the state of California sucks. It just doesn’t work. It doesn’t make sense. It’s too hard.’ – Hil Davis, CEO, Digital Brands Group

It is the most viral boardroom quote of the month, and for good reason: Hil Davis isn’t the first CEO to let slip his total frustration with the State of California, but he’s among the bluntest. If you’re still wondering just how bad things have gotten for job creators in the Golden State, consider this: Digital Brands Group is moving their entire headquarters 1,300 miles east to Round Rock, Texas, taking dozens of jobs and millions of dollars in economic energy with them. The high cost of living, punishing taxes, suffocating business rules, and long commutes have simply pushed them over the edge.

This latest high-profile exit is yet another bombshell for a state already reeling from tax revenue losses and rising pushback from employers. Digital Brands Group’s relocation parallels a bigger pattern of companies flooding out of California for Texas, lured by lower costs, fewer regulations, and a streamlined path to growth. And it’s not just legal grumbling. According to fresh IRS data, Los Angeles County lost nearly 17,500 tax filers and a jaw-dropping $1.9 billion in annual income as talent and wealth stampede for friendlier states.

California’s progressive policies haven’t just squeezed big business-they’re now threatening state solvency. While Sacramento debates yet another eye-watering new tax scheme (a proposed one-time tax of up to 5% on anyone worth $1 billion), CEOs and CFOs across Silicon Valley and L.A. are putting their money where their mouth is-on a one-way flight to Texas.

‘You’ve got Tesla, you’ve got SpaceX, you’ve got Chevron-all packing up and heading to Texas. We’re just the next in line,’ Hil Davis told shareholders last week. ‘If California won’t listen, Texas sure will.’

From Back-Breaking California Regulations to Business Boom in Texas

Let’s break down the numbers. Digital Brands Group (DBG), an e-commerce and apparel powerhouse, has officially left Los Angeles behind, snagging a sprawling 70,000-square-foot lease for combined warehouse and head office space in the Texas town of Round Rock-just north of booming Austin. Forty-seven thousand square feet are already up and running, with rapid expansion planned within a year. More than 30 skilled employees joined the migration, with the promise of ‘substantial job growth’ and much brighter days ahead.

This is no cookie-cutter move-it’s part of an accelerating migration. In the words of the Texas Economic Development & Tourism Office, large-scale headquarter relocations have turned Central Texas into the premier destination for tech-enabled and growth-oriented companies. And when California businesses leave town, they don’t look back. 

DBG is not alone-think Chevron, which decided last year to vacate San Ramon, CA, for Houston, TX (just the latest energy giant to join the exodus in 2024). And who can forget tech kingpins Tesla and SpaceX plotting their own stampede, hounded by skyrocketing costs and a legislature obsessed with more regulation? (California exodus, Wikipedia) Even entertainment icons like David Ellison of Skydance are now openly mulling a move, citing legal showdowns with California’s zealous Attorney General (Axios).

‘Why would any sane CEO stay in a place where politicians see you as a piggy bank,’ one Round Rock business owner quipped on X. ‘Welcome to the land of free enterprise!’ The social media applause for Texas-and open ridicule for California-has been swift, loud, and unrelenting.

Meanwhile, California’s problems only balloon. The tax base is shrinking. LA County leads the nation in outward migration, and Orange, San Diego, Riverside, and San Bernardino counties are not far behind. Every time a business relocates over state lines, that’s another chunk of income, property, and sales tax vaporized from Sacramento’s fragile budget. State leaders keep insisting Silicon Valley’s magic is irreplaceable-but the numbers aren’t lying. Growth in Texas means job creators are voting with their feet-and their balance sheets.

California’s Bleeding Tax Base-And the Red State Opportunity Boom

The Golden State’s defenders argue that another tax hike on billionaires could patch the budget and fund new social programs. Yet, as news of each fresh business migration breaks, skepticism grows even on the left. Critics point out that massive departures by companies like DBG, Tesla, and Chevron, plus the flight of high-income earners, means there’s less money in the pot every year. Rising legal costs-cited by Hil Davis as one of his top headwinds-don’t inspire CEOs to stick around and ‘fund the revolution.’

Meanwhile, Texas and Florida are rolling out the red carpet. The Round Rock Chamber called DBG’s move a ‘sweeping economic development win’-and they’re not exaggerating. With its pro-growth tax code, affordable real estate, and streamlined regulatory climate, Texas is fast becoming the gold standard for high-value businesses in search of a future.

Despite a select handful of production operations still running in Los Angeles, DBG’s new home is expected to see rapid growth in just its first year. Round Rock-once a sleepy suburb-is fast becoming a power hub for the next generation of Commerce USA. And it’s more than just warehouse jobs: sports apparel, collegiate licensing, and tech-driven e-commerce are all set to expand.

‘Texas feels like America-hard work pays off, and government isn’t always in your pocket,’ said a DBG employee who recently made the move with his family. ‘It’s night and day from the old California way.’

Wall Street, meanwhile, is watching all this closely. Every new departure signals another blow to California’s long-held reputation as the business brain trust of America. Elon Musk famously clashed with Golden State authorities over lockdowns, then made good on his promise to go where he’s appreciated. Even Hollywood is looking for the exit now that paramilitary-level regulations and legal threats are becoming the norm.

Election 2028 looms on the horizon, and conservatives are using every high-profile relocation to drive home their core campaign message: Big government costs jobs, chokes freedom, and stifles innovation. In a country still reeling from the lockdowns and destructive tax hikes of the pre-Trump era, Americans are paying close attention to where the jobs and money flow-and where they’re drying up.

The Message is Loud and Clear: Move to Win, Tax and Lose

Will California politicians finally listen? Unlikely, say business leaders and industry groups who now see Texas and Florida as the only safe bets for expansion. Hil Davis couldn’t have said it better: the real cost of California’s progressive regime is not measured just in dollars, but in lost opportunity, innovation, and American jobs.

Round Rock isn’t just gaining a company-it’s raking in new investments, families, and future taxpayers. Meanwhile, Sacramento’s ever-growing tax wishlist is backfiring in real time. For every DBG that leaves, more will follow-taking with them the dreams and energy California once symbolized to the world.

‘California is for the rich. Texas is for the builders,’ one viral meme put it. ‘Guess which one runs out of gas first.’

As the national conversation heats up ahead of 2028, Digital Brands Group’s move will serve as a cautionary tale-and a rallying cry for free-market believers everywhere. One CEO’s loud exit is just the beginning. Will state lawmakers double down on failed policies, or finally wake up before the exodus becomes a flood too big even for California to ignore?

History-and the next set of quarterly earnings-will decide.