Showing posts with label income tax. Show all posts
Showing posts with label income tax. Show all posts

Saturday, June 6, 2026

The Race To Bankruptcy Court: New Jersey Also Coming On Strong

Let’s take a brief break from our run of posts regarding the massive corruption and fraud in government programs and 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 in the 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.

The reason for returning to this topic in the midst of our corruption series is because there have been some significant developments in the race to bankruptcy court. However, 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)Our previous post discussed the great progress Seattle and its mayor are making in the race to bankruptcy court. And while Seattle has entered its own financial death spiral, New Jersey politicians have not been sitting idly by as they also have been driving companies and tax base out of their state:
  • Samsung Electronics recently announced that it is moving a significant portion of its instate employee base out of New Jersey and moving to state income tax free Texas.
  • The move would take about 1,000 company workers out of New Jersey.
  • Samsung had been operating in the state since the 1980s.
  • According to a company release: “Samsung Electronics America Inc. is undergoing a business transformation designed to better position our organization for long-term growth and future success. As part of this effort, we are relocating our US headquarters from New Jersey to our existing campus in Plano, Texas, building on our 30-year presence in the state.”
  • This out migration comes less than a year after the company opened up a new headquarters campus in New Jersey.
  • The New Jersey Business & Industry Association issued a statement that reinforced the perception that New Jersey is not an easy operating climate for businesses, urging the state political class to ease regulations, cut red tape, and make the state more attractive to businesses.
  • Statements from the company were typical business nonsense, talking about realigning priorities, focusing resources in one location, etc.
Not mentioned in the company releases was the reality that New Jersey has some of the highest personal and business taxes in the country, a tax burden that eventually wears out people and companies, forcing them to find better financial conditions in states like Texas.

2)But Samsung is not the only major company moving business resources, employees, and tax revenue out New Jersey:

  • Budweiser recently announced that it is closing down one of its major historic breweries in Newark, New Jersey.
  • While Samsung had a very short major presence in the state, the Newark brewery was a fixture in Newark and New Jersey for 75 years.
  • The company also announced that it was selling the brewery property to a commercial real estate company that will likely convert the property to a warehouse facility.
  • The brewery had operated through wars, recessions, inflationary periods, the pandemic, hurricanes, and other man made and natural disasters.
  • But apparently it could not withstand the unfriendly and high tax environment of New Jersey.
  • 475 brewery employees either have to relocate to another out of state Budweiser brewery or look for other employment.
But none of this should be surprising since New Jersey:
  • Has the highest corporate tax rate in the country at 11.5%.
  • Has a 2.5% surcharge tax on the largest state employers.
  • Has the highest tax burden in the region as a percentage of personal income.
  • Has the second highest top personal income tax rate in the country.
  • Has one of the highest unemployment insurance tax rates in the country.
  • Has the worst business competitiveness rating in the region according to the New Jersey Business and Industry Association.
Tax and tax and tax and eventually people and businesses get smart and move to a better financial situation. And the situation is not expected to get better any time soon since the new governor has proposed a record-setting $60.7 billion budget for the state government even though her tax base is getting smaller by the day.

3)The website for radio station 101.5 recently did an excellent job in documenting how many jobs have been lost in the state since just the beginning of the year. Their review can be accessed at the following link:

https://nj1015.com/nj-job-losses-still-growing/

Some highlights of their reporting include the following:
  • More than 7,600 employees have been laid off since the beginning of the year.
  • These layoffs occurred in all sorts of businesses, including energy, retail, hotel, drug stores, and other business types.
  • ExxonMobil is leaving the state in order to reincorporate in Texas, ending a whopping 140 year presence in New Jersey.
  • ExxonMobil executives pointed out that Texas has no state income tax and lower business operating costs and regulations.
  • The number of Fortune 500 companies headquartered in the state has dropped from 22 in 2018 to 15 in 2025.
  • Other companies that have already moved operations and employees or intend to do so out of New Jersey include Verizon, Novartis, Johnson & Johnson, Prudential, JP Morgan Merck, Optum, and Acme supermarkets.
  • As the article points out, not only do business and employee tax resources leave but economic vitality and growth, charitable donations, and future growth opportunities leave also.
  • One state politician, Heather Simmons, understands the problem: "We grow revenue by growing our economy, not by raising taxes. There is increasing consensus, from the Governor’s office and colleagues in the Legislature, that new revenue must come from economic growth, not from raising taxes."
  • A simple concept but one that eludes most politicians in cities and states in a financial death spiral.
Detailed company layoffs and downsizing actions are listed in the link listed above but taste of what is in that article includes the following:
  • Verizon - 1,319 layoffs in Basking Ridge.
  • Bristol Myers Squib - 1,156 layoffs in Lawrence
  • Rite Aid Drugstores - 1,122 layoffs around the state, 16 store locations closed.
Just a sample of what is going happening to the tax base in the state.

Yes, Seattle is coming on strong in the race to bankruptcy. California as a state probably still has the state led in the race to bankruptcy. But New Jersey is deep into its own financial death spiral so they are definitely still in the running.

**********************

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



**********************


Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

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Tuesday, April 7, 2026

The Race To Bankruptcy Court: Proof That New York, California, and Washington Politicians Still Do Not Get It

 It seems we are in a little bit of a rut in that we seem to be getting overwhelmed with news about our choice for states and major cities that are likely to go bankrupt relatively soon. As always, our top state governments that we think are nearing bankruptcy include New York, New Jersey, Illinois, and California. Our top major cities we think are rapidly approaching bankruptcy include New York City, Chicago, Los Angeles, and San Francisco.


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, let's look at the mounting evidence across the country on how this  is playing out.

1)As readers of this blog  know, it is  our  opinion that New York state and New York City are the leading  state and city governments in the race to going bankrupt. This view was recently reinforced by reporting by the Blue State News website that provided some data that supports our premise on the  bankruptcy race leaders and is in  line with the process outlined above. That link can be accessed at:


https://bluestatebluesnews.com/kathy-hochul-went-to-palm-beach-to-beg-rich-new-yorkers-to-come-back-and-it-did-not-go-well/?utm_campaign=bsb_3313015328&utm_medium=email&utm_source=&utm_term=&utm_content=


1)The facts uncovered in  the article include the following:


  • Recall back in  2022 that New York  governor,  Kathy Hochul,  told New Yorkers who did not like her policies to “jump” on a bus and head to Florida.

  • Unfortunately, for her and the state government tax base, tens of thousands of New Yorkers took her advice, left the state, and moved out of state, taking their tax payments with them.

  • But by 2026 she realized her mistake and  that people had left the state in  droves, causing a budget crisis and tax revenue shortfall: "I need people who are high-net-worth to support the generous social programs that we want to have in our state. Maybe the first step should be to go down to Palm Beach and see who we can bring back home – because our tax base has been eroded."

  • The reality that Hochul does not realize that this is idiocy: people left because of high taxes and a worsening of the quality of  life and none of that has changed under Hochul so who  in their right  mind would come back  to the same situation that caused them to leave in the  first place?

  • Hochul’s Republican opponent in the upcoming governor’s race, Bruce Blakeman, tried to  explain her economic ignorance to Hochul: "When you raise taxes, drive up the cost of living, make it harder to do business, and try to destroy families' savings, people leave. Apparently Hochul's new economic development strategy is to ask them politely to come back."

  • And the devastation  to the state tax base  is pretty amazing.

  • According  to  the Citizens Budget Commission, just over 20,000 or so New Yorkers who recently relocated to Florida’s Palm Beach county were  earning  on average about $190,000, three  times the  national average.

  • The Commission found that the 26,000 ex-New Yorkers who relocated to Miami itself averaged a whopping $266,000 a year in income.

  • New York state’s share of  millionaires has  dropped 31% over the past five years while Palm Beach's billionaire population has grown by over 50%.

  • When  New York City mayor, Zohran Mamdani, said he wanted to begin taxing  inheritances starting at $750,000, about 90% lower than the current level, and raise the tax on any inheritance over that number to 50%, Palm Beach real estate  deals in Florida  immediately spiked by $100 million.


Wealthy people  most affected by tax increases have the easiest time moving out of a state or city to avoid paying higher and higher taxes. Politicians either do not have the brains, the fortitude, or courage to  make  government operations smaller, more  efficient, or kill them off altogether. So they take the coward’s way out and raise taxes. And the  financial  death spiral  is in full motion,  as outlined by the bankruptcy steps listed above. 


Hochul at least realizes that the situation she and her New York political brethren have  created, she just does not have the mindset to  fix what she started breaking back in  2022 with her flippant jump on the bus to  Florida attitude.


2)But the Blue State News article goes on, outside of New York, to  show that similar insanity is going on elsewhere in  mostly liberal/Democratic government entities  around  the country:


  • When Washington's state government politicians raised the state capital gains tax back in 2021, over 2,300 of the state’s wealthier residents left for other states that same year before the tax even took effect, not waiting around  to pay more in  taxes,

  • The year the increased tax load took effect, another almost 6,400  high earners left the state, taking another $2 billion in income with them.

  • Notable and wealthy out-migration folks including Jeff Bezos of Amazon fame and Ken Fisher of Fisher Investments..’

  • Not learning from their mistake in 2021 on raising capital gains tax rates, Washington  state politicians recently introduced a state income tax on earners making  over a million  dollars a year.

  • Shortly afterwards, Starbucks billionaire founder, Howard Schultz, moved out of the state and Starbucks moved a chunk of its headquarters operation out of Washington and relocated it to Tennessee


Washington  politicians should have  listened to the chief economist of the Heritage Foundation E.J. Antoni when he observed that wealth taxes have “literally never worked anywhere” and “The tax base collapses,.  The burden shifts to whoever stays behind.” And that tax burden falls on those that can afford it least, the middle class and  the  poor, the only ones  left once the wealthy leave.”


3)As we have often discussed, and Blue State News reiterates, the insanity of constantly raising taxes on  the wealthy has been so prevalent in California:


  • State politicians in California have imposed the highest gas taxes in  the county on  its citizens and the state has possibly the highest state income tax burden .

  • As a result, residents have been moving out  of the state in much larger  numbers than who are moving  in.

  • Businesses have also been getting out of the state due to not only high taxes but ridiculously insane and burdensome business regulations.

  • As we have discussed, big businesses like Tesla,Yamaha, Toyota, and Schwab  along with other  middle  sized and  small businesses have already left, taking  their tax base and  economic buying power  with them.

  • The proposed introduction of a stupid tax on wealth, not income, has already driven  billionaires out of the state and with them  went about $1 trillion in  assets that the state can no longer tax or rely on  for economic growth.

  • Just six California  billionaires who departed the state to avoid the weather tax took $27 billion in potential tax income with them.


The Blue State News article  concludes with the  following  simple analysis of what happens when you tax and tax and tax and do not fix the underlying government budget problems: “The blue states built their budgets on the assumption that high earners had no choice but to stay. Remote work ended that assumption. And now the governors who told conservatives to leave are standing in Palm Beach with their hands out. When the wealthy leave, the bill doesn't disappear. It gets redistributed. Services get cut, or the next rung of earners gets hit – the $150,000 household, then the $100,000 household, then yours. That's not a theory. That's New York's recent history playing out in real time, and California is two steps behind on the same road.”


And again, it is not just the tax base that gets eroded when the wealthy are driven out.   These folks have  a lot of disposable income, income available to spend on dining, car purchases, concert tickets, clothing, etc. that will no longer be spent in a city or state when politicians cannot live within their tax base revenue.


So, I think our premise still holds: pretty soon a major city or state government will  go  bankrupt, the financial death  spiral  is already taking place across the country.  The  only question  is which one wins the race to bankruptcy court.


**********************

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



**********************


Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:
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