Let’s return to one of the hottest topics we have been covering over the past few years, coverage that has intensified recently: which major city or state government will get to bankruptcy court first? Our primary cities it he race to bankruptcy include New York City, Chicago, Los Angeles, San Francisco, and newcomer, Seattle. The state governments that we think are soon heading into bankruptcy include New York, New Jersey, Illinois, and California with Washington state a newcomer to the race.
Before reviewing the latest news and seeing which state or city is making the best progress towards government bankruptcy, let’s review how these cities and states got themselves into this financial death spiral position to begin with:
A government entity keeps expanding its budget, eventually putting pressure on the tax revenue stream it receives.
At some point, rather than cut government spending or make its programs more efficient financially, the politicians in charge raise taxes to meet the ever growing government expenditures.
The raising of taxes causes some residents and businesses to leave the city or state for less tax burdensome areas, reducing the tax base and reducing the revenue stream.
Rather than cut expenses and become more efficient to match the reduced tax revenue stream, politicians in the above cities or states raise the tax burden even more.
This causes more residents and businesses to flee the city or state, further reducing the tax base and tax revenue stream.
At some point politicians panic and raise taxes more and start cutting vital government services (e.g. police, fire, education) in order to try and balance government spending against the shrinking tax base and revenue stream.
The reduction in quality of government services in particular and quality of life in general drives more residents and businesses out of the area.
Eventually, the expenses, costs and financial liabilities outstrip the reduced tax stream and bankruptcy occurs.
Okay that’s the process, now lets check the progress some of the above listed government entities are making to achieve this bankruptcy goal against this process:
1)Today’s discussion will focus a lot on what the politicians in the cities and states that are heading for bankruptcy are focusing their time on and it is not finding ways to make government more efficient, more effective, less expensive and free of fraud.
Let’s start out in Seattle, a late comer to the race to bankruptcy but an entrant that is making up for lost time:
Katie Wilson is the new communist mayor in the city and has made it clear that heavier and heavier taxation is her main way to run the city government.
We have already discussed the horrible attitude she has towards wealthy, highly taxed people that live in the city and the reality that many of them have already left the city to get out from under the high taxation.
When asked what that means to the city, i.e. millionaire taxpayers leaving, she condescendingly said “Bye!” to her exiting tax base.
We have also discussed the reality that a primary employer in the city of Seattle has already decided to take 2,000 high paying knobs out of the city and the state of Washington and move them to Tennessee.
Depending on the source, the office vacancy rate in the city for office space is one of the highest in the country as businesses flee the city or do not come into the city given the high tax burden.
While all of this is going on, Mayor Wilson recently spent some of her mayoral time cutting the ribbon on new downtown public restrooms.
Yes, her tax base is cratering and this is what she is spending time on public restrooms.
It is this type of attitude and priorities that show the remaining taxpayers of the city that maybe getting out of town is a good idea since apparently the good mayor is spending time on things that are not going to make the city better, more robust, and less crime filled. But at least going to the restroom in the city is going to be easier.
2)Rob Saka is a Seattle city council member. Prior to Wilson’s election he stated that he was looking forward to partnering with her if she became mayor and help her build a “thriving, inclusive Seattle that uplifts working families.”
And yet, less than five months into Wilson’s mayoral term, even Saka is having second thoughts regarding her priorities, telling the New York Times, “I am gravely concerned. This is real.” Thus, very quickly even he recognized that her policies and priorities may not be optimal. Maybe his optimism went out the window because:
She said “Bye!” to any departing city millionaires.
Starbucks just moved 2,000 jobs out of the city to Tennessee.
The Washington state government raised the state estate tax to 35%, the highest in the country in 2025 before reducing it to a still very high 20% since the state government politicians realized that wealthy people were leaving the state and the 35% estate tax was probably a driver.
The Seattle office vacancy rate was 30% at the end of 2025, a record high.
A day spa company is moving out of Seattle to Nashville, Tennessee because the company’s founder specifically cited the tax burden in the state and city.
Seattle entrepreneur Marc Barros announced two months ago he was moving his company to Wyoming.
Jeff Bezos, Amazon founder and billionaire, left the state of Washington for Florida in 2023 when the state government implemented a capital gains tax.
The Tax Foundation ranked Washington as the 45th worst tax state in their 2026 State Tax Competitiveness Index.
The Columbia Tower Club, a long running gathering tradition for executives and civic leaders at the top of Seattle's tallest building, has disbanded.
The warning lights are flashing brightly: wealthy folks leaving, companies leaving, supporters gravely concerned and the mayor is cutting a ribbon at a new city restroom.
3)Across the country the same warning lights are flashing brightly in front of the New York state government and New York City and they are also being ignored:
Governor Kathy Hochul is pushing for a new, additional tax on wealthy people that own a property in New York City.
This is the same governor that stated several months ago that wealthy state residents are moving to Florida to get out from under the heavy tax burden in the state and city and yet, she is supporting more of a tax burden.
This is a so-called pier-a-terre tax that would be imposed on luxury second homes priced over $1 million.
NYC councilwoman, Councilwoman Joann Ariolae, seems to be one of the few New York politicians that gets it: “There’s this mistaken belief out there that people will never leave New York no matter how high taxes go because ‘it’s New York. But people can easily move right across the river to Hoboken, take their tax dollars with them, and still be minutes from Manhattan. What we are seeing here is a short-term solution from the governor in an election year that will have long-term consequences for New Yorkers.”
According to Ms. Ariolae, New York state is the worst state for tax competitiveness and all of these additional taxes are just going to make it even worse.
One voice of sanity in a sea of stupidity and idiocy.
4)Illinois is one of our top state candidates to go bankrupt in the near future. Given this dire situation, it is pretty disgusting that a government employee would waste limited tax dollars in such a blatant disrespect for taxpayer wealth:
Quintina Brown is the Markham Park District executive director in Illinois.
She allegedly used her government/taxpayer funded credit card, wait for it, to book a helicopter for her daughter’s prom.
Apparently, her government credit card number was listed on the invoice for the helicopter.
The helicopter landed in Roesner Park in Markham, Illinois and her daughter, in prom dress, was on board and ready for prom pictures.
City officials claimed that no official permission was given for the helicopter landing or rental or to be paid with taxpayer money and on the helicopter rental agreement was Brown’s signature and government credit card number.
The helicopter stayed at the park for at least three hours at a rate of $80 for every six minutes beyond the first hour.
According to Illinois law, misusing government taxpayer money is a Class 3 felony so Ms.Brown may not only get fined but is also possibly facing prison time.
Makes you wonder how many other zany uses of taxpayer money are being spent by government officials while the state hurtles towards bankruptcy.
5)One last ridiculous waste of taxpayer money that could be potentially spent by a city on our list heading for bankruptcy:
Los Angeles is a city in distress and one of our top candidates to go bankrupt.
Crime is high, homelessness is high, businesses are fleeing the city and state as are residents, the rebuilding of the city after the wildfires is almost non-existent, etc.
There is a continuing budget crisis and shortage of tax revenue despite some of the highest state and city taxes in the country.
And yet Los Angeles mayor, Karen Bass, seems to have a different sense of impotence relative to these issues that affect just about every city resident and business.
She recently announced that she thought it would be a good idea to use taxpayer money to provide dental care for homeless meth users since people without good teeth have a hard time getting a job.
Free dental care for addicts using tax money to fix what these people intentionally induced on themselves.
Not provide additional mental health services for the addicted homeless, not provide shelter and food for addicted homeless folks, not provide drug addiction treatment, let’s prioritize fixing their teeth, a condition they brought onto themselves using taxpayer money.
According to the good mayor: “How many people that you meet that are unhoused don’t have teeth at all? They don’t have teeth. Why? Because meth rots your teeth. You can’t succeed without teeth. So there needs to be comprehensive healthcare provided to people.”
So, people that are taxpaying, non-homeless folks would pay for free dental care for drug addicts while they would have to pay for their own dental care.
So people that are taxpaying non-homeless folks who may have a medical condition would have to pay for drug addicts’ dental care and their own health care to address their own health issues.
Look, I am not insensitive to people with addictions. They need help and compassion. But fixing their teeth is a symptom of bigger root causes for their homelessness and addictions. Taxpayer money should be directed to fixing the root causes and the bad teeth problem eventually goes away.
Without fixing the root causes the bad teeth issue just gets bigger and bigger every day. And eventually residents will realize that their tax dollars are treating a symptom and will decide that there are better places to live and pay taxes that make better use of their tax dollars.
Stupid and silly priorities, be it public restrooms in Seattle or meth rotted teeth in Los Angeles, the continual wasting of taxpayer dollars, the inability to understand basic economic concepts, i.e. if taxes get too high, the tax base gets lower very quickly. All of which feeds the race to bankruptcy court.
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If you agree that we need to deseat every member of Congress for their lack of success and accomplishment, then please consider going to the following petition link to help the cause:
https://www.change.org/p/deseat-congress-reset-freedom
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