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FIRST ON FOX — Treasury Secretary Scott Bessent highlighted the stark difference he sees emerging between Texas and California as well as the ‘tale of two states’ cropping up between red and blue jurisdictions.
“In California, I saw firsthand what years of failed governance looks like: a tax system that is hostile to ambition. A regulatory state that smothers enterprise. An economic climate indifferent to consequence,” he said during a meeting at the Petroleum Club of Houston on Friday in remarks shared exclusively with Fox News Digital.
California has seen a number of high-profile defections in recent years, with many businesses and wealthy individuals citing the state’s regulations and taxation regime as the reasons for their exit.
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Chevron, Tesla, Charles Schwab and Hewlett Packard Enterprise, to name a few, have all abandoned their California headquarters and shifted operations to Texas. IRS migration data also shows that the Golden State is hemorrhaging high-earning taxpayers, imperiling its finances.
“Here in Texas, meanwhile, the contrast is so striking that it begins to feel like a tale of two states,” Bessent said.
And it’s true that the Lone Star State’s business-friendly policies and lower taxes have attracted more American families and businesses to move from other states to Texas.
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During the meeting on Friday, Bessent also highlighted the importance of energy policy as a cornerstone of President Donald Trump’s economic policies.
“The AI race may be accelerated by the elegance of our code, but it will be won by the abundance of our energy,” he said. “More than strengthening an economy, energy abundance also secures a nation. Economic security is national security.”
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He said that Texas is spearheading that growth.
Texas has rapidly expanded its energy production to meet booming demand, partially spurred by the construction of new data centers, recently surpassing California as the state with the most utility-scale solar capacity and hitting record-breaking levels for both crude oil production and low-carbon electricity generation.
“Texas has become America’s center of gravity because it is fostering the conditions for families and businesses to flourish,” Bessent went on.
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Data indicates that Texas has seen considerable success in attracting businesses and taxpayers to the state.
Of the 725 companies that relocated headquarters between 2018 and 2025, per a CBRE report, 230 of them moved to Houston, Dallas and Austin alone. IRS migration data also shows that the Lone Star state saw a net increase of 56,000 tax filers between 2022 and 2023.
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