Trust California to be different where it comes to the space launch industry. While other states, such as Texas and Florida, are using tax breaks and other incentives to attract launch companies such as SpaceX and Blue Origin, the formerly Golden State is devising a new way to tax rocket launches. According to Ars Technica, California’s Franchise Tax Board is proposing to slap taxes on rocket launches based on “miles traveled” much like trucks and trains are assessed.
Presumably that all depends on how far a rocket goes before it releases a payload.
If the tax passes, and since this is California which would tax the air if it could it likely would, the result will be a slow but steady departure of the space launch industry from the state. Private launches from the Kennedy Space Center in Florida and the still under construction SpaceX port near Brownsville will benefit.
California has an almost unique geographical advantage in that Vandenberg Air Force Base is positioned for launches into polar orbit. However, polar launches can also be done from the Kodiak Launch Complex in Alaska.
California may well be able to kill the launch industry within the state.
The Mojave Spaceport, which was designed to accommodate horizontal takeoff and landing spacecraft, will likely suffer as well. Texas is developing similar spaceports at Midland and Ellington Field south of Houston. These facilities will be glad of any extra business they get if and when launch companies start to evacuate California.
Public policy experts like to talk about the Blue And Red models of governance. The blue model features high taxes, a severe regulatory regime, with plenty of spending and social services. The tradeoff of the blue model is higher unemployment and a lower level of business activity. The red model has lower taxes, a light regulatory regime, and less spending and social services.
States the follow the red model see less unemployment and a greater level of business activity. California is the largest practitioner of the blue model and Texas the most noted of the red model.
The way the rocket launch industry is being treated is emblematic of the blue and red models. California sees the nascent rocket launch industry as cash cows, to be shaken down for as much money as can be extracted. States like Texas and Florida try to nurture industries such as SpaceX and Blue Origin with the view that it will be better in the long run as they hire workers, buy goods and services within the state, and otherwise contribute to economic growth. We shall see how these models work now that California is making its taxation move.