Will The Proposed California Wealth Tax Make It Win The Race To Bankruptcy Court?

 We have had a running  discussion for a number of years under the theory that  certain city and  state governments across the country are on a course to relatively quickly go  bankrupt. The states we think have the  best chance of winning the race to bankruptcy court include California, New York, New Jersey and Illinois. The cities with the best chance include New York  City, Los Angeles, Chicago,  and San  Francisco.

The bankruptcy trajectory is unfolding as follows:

• State and city politicians continue to implement and manage government programs that are inefficient, ineffective, wasteful, or criminally  infested.

• Rather than  become more  efficient, the politicians raise taxes which drives residents and businesses to leave and  relocate, reducing the tax base.

• Faced with a reduced tax base,  rather than cut back  spending to match the reduced tax revenue, politicians typically raise taxes even more, which drives more residents and businesses out of  the state.

• Eventually police fire,  education, and other city and  state services suffer from lack of funding which  reduces the quality of life and drives more folks out of the  city or state.

• Eventually, taxes cannot be raised enough on a shrinking tax base to offset the government spending and debt obligations and  the financial viability of the government  entity crashes in bankruptcy proceedings.

Over the years, different states and  cities have jockeyed for the  lead in the race  to bankruptcy. They all share the death spiral scenario laid out above. Citywise, we now believe that New York City will be the next major city to go bankrupt, given the idiotic and naive governing theories of the recently elected mayor, Zohran  Mamdani. His communist like ideas about governing have failed around the  world and historically but that is not stopping him.

However, state wise, we think that California will be the  first state to  declare bankruptcy. Consider the following realities about living in  California:

• Only two states, New  Jersey and New York, place heavier tax burdens on their  residents than California.

• California has the highest state government debt  load of any other state

• Only five states have a higher crime rate than  California.

• Only one state (Hawaii) has higher average gas prices than  California.

• Only one state (Hawaii) has higher consumer electricity prices than California with the average cost of residential  electricity being 75% higher than the  national  average.

• Only one state (Hawaii) has  higher commercial electricity prices than California with the average cost of commercial electricity being more  than double the national  average.

• Only four states have higher egg prices than  California.

• No state has higher prices for ground beef than California.

• Only one state (Hawaii) has a higher median housing prices than California which is more than double the  normal  average.

• California has the sixth highest homeless rate and the  most homeless people in the county.

• Among states,  California currently has the  highest unemployment rate in the country, about 40% higher than  the  national  average.

• As an example of the ineptness of the state’s  politicians, their highly touted high speed rail line is now at least 13 years behind schedule and its cost overrun is up to tens of billions of dollars.

I could go on and on but you  get the idea: high taxes, high unemployment,  high gas and  electric prices, high crime and homeless rates, deteriorating quality of life all of which result in  residents and companies (Tesla, Schwab, Toyota, oil  companies) fleeing the state.

But rather than learn from their past mistakes,  rather than taking an honest look at why people are leaving the state which reduces the tax base, the brilliant politicians in the state want to  raise taxes even more:

• Their proposal is to levy a one time 5% tax on the total WEALTH, not INCOME, of billionaires living in the state.

• So if the total  assets of  someone in the state was exactly $1 billion they would have to pay a wealth tax of $50 million  to the state.

• This tax  would be on top  of the regular state income tax burden.

• Needless to say,  billionaires do  not like this idea of  taxing wealth and many have already made plans to abandon the state for other states.

• Larry Page and Sergey Brin,, co-founders of Google, have a combined wealth total of about $518 billion which means if they stay in the state they would owe about $26 billion.

• News reports say that they have  already moved much if not all  of their business interests out  of state and have purchased homes in  tax  friendly Florida.

• Peter  Thiel, Paypal founder and  early investor in Facebook, moved his assets to a new office in Miami.

• And these are the  ones that have announced their plans, there are likely many others that already silently moved  out of state to avoid  this  onerous and  stupid tax.

It is stupid because not only will the state not get the amount of wealth tax that they anticipate, they will no  longer get the state income tax revenue that these billionaires are not going to have  to pay in the future since they are no longer state residents. 

Also, many of these folks built huge business successes in the state of California and  now the state is coming  after them with a taxing vengeance. Thus, future entrepreneurs may say no to getting started in  California, given this additional tax onus and thus, the California Silicon Valley tax bucket gets smaller and  smaller in the future.

A number of years ago we talked about what happened in the state of Maryland. Several years ago the Maryland state  politicians decided that it would be a great idea to raise the state income tax rate on every resident earning over a million dollars a year, Very shortly after the tax increase tax rate took effect, the state government  found out that they were getting less tax revenue from the state’s millionaires even though they had raised the tax rate on those folks. 

Very simply: the state’s millionaires simply moved into neighboring states where the tax burden would be  less onerous on them. Thus, the higher tax rate was not enough to overcome the reduced number of millionaires which resulted in a smaller tax base. The same thing will likely happen in California but it will  be the billionaires who got out, not the  millionaires.

Details of the Maryland case can be read at the following  link:

https://loathemygovernment.blogspot.com/2012/12/day-7-eight-days-of-logic-and-sanity.html

Thus, given the existing problems in the state, the flight of billionaires out of the state, and the lowered attractiveness of starting new businesses in the state, it looks like California may have now taken the lead in the race to bankruptcy court. 

One last thought: think about the “near  billionaires” in the state. Since politicians rarely, if ever, reduce a tax  rate or  eliminate a tax, think  about the resident who is worth almost a billion dollars in  total wealth. You can be sure that this person will certainly be seriously looking to leave the state,  anticipating that at some point in the future that billion dollar barrier is going to get lower and the tax on wealth will go  higher.

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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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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:

https://www.amazon.com/Love-My-Country-Loathe-Government/dp/1604942789/ref=sr_1_1?dchild=1&keywords=love+my+country%2C+loathe+my+government&qid=1607716020&sr=8-1

Please visit the following sites for freedom:

http://www.reason.com

http://www.cato.org

http://www.openthebooks.com

http://www.conventionofstates.com

Alexandria Ocasio-Cortez Insanity, Part 1: Not Knowing Simple Economics, Not Knowing Simple Civics, Not Knowing Simple Math and More

Over the past few months, New York City Congresswoman Alexandria Ocasio-Cortez has established herself as a human gaffe machine. Her inability to do simple math, her outlandish ideas based on an alternative reality, her economic ignorance, and lack of common sense has resulted in an almost daily stream of idiocy, inane comments, and ridiculous ideas that have no basis in reality.

As a result, most of our recent political class insanity posts have almost always had an Ocasio-Cortez piece of insanity. Thus, we have decided to separately track her craziness and idiotic takes on economics, business, government, and whatever else on a regular basis under its own set of posts. She deserves to have a separate effort that captures all of the ridiculousness she espouses.

The format we will do is to start with a set of her original inane ideas and just continue to build on that initial list as time goes by. If the list gets too large, which it is likely to do, we will then find a good breaking point to start another list. We will try to source the original source of all of her gaffes, trying to use her own words that were stated either orally or via her Twitter account, a source of endless inane comments and ideas.

1-Despite supposedly having an economics degree, she made an initial fool of herself when she claimed that the reason the unemployment rate was so low was because so many Americans had to work more than one job to get by. Any halfway smart high school economics class student could probably tell her that the unemployment rate calculation does not care how many jobs a person is working, just whether or not they are working. And yet this college graduate had no idea.

2- She compounded this lack of knowledge on the unemployment rate by claiming that the number of people in this country holding multiple jobs was large and growing. However, a simple check of government statistics would show her that the number of people holding multiple jobs is actually quite small and shrinking, the exact opposite of what she claimed. Thus, she was either lying or making up a reality not based on actual data.

3-Despite being an elected member of Congress, she erroneously claimed that the structure of our government process included three branches: the Presidency, the Senate and the House of Representatives. Pretty sure that the Supreme Court justices were surprised to find out that they were no longer a branch of the government.

4-A financial audit of the Pentagon found that over a twenty year period, about $21 TRILLION in budget dollars was mishandled, misclassified, or not accounted for properly. Rather than understand the audit, she immediately and incorrectly assumed that the Pentagon had misspent and wastefully spent $21 TRILLION.

However, if she had done a simple math and logic calculation based on history and actual data, she would have found out that the ENTIRE Pentagon budget over that twenty year period was only about $12 TRILLION, making it impossible to waste $21 TRILLION when the budget was about 40% less than that. This idiocy earned the highest level of lying from the Washington Post, the dreaded four Pinocchios: ”Ocasio-Cortez is not the first Twitter user to mangle information from a news report. But it’s unconvincing to try to pass this off as a rhetorical point being misread. She cited the $21 trillion figure and said ‘66% of Medicare for All could have been funded already by the Pentagon.’ That’s a direct comparison. It’s badly flawed. The same article she referenced on Twitter would have set her straight. The tweet is still up, probably causing confusion. So we will award Four Pinocchios to Ocasio-Cortez.”

5-As a socialist and/or communist, Ocasio-Cortez wants to impose massive socialism/communism programs on the country. One of her favorite pipe dreams is the so-called “Medicare For All” program that would put people like her and the Federal government in charge of every aspect of every American’s health care. A generally accepted cost estimate for this disaster is $32 TRILLION over the first ten years or about $3.2 TRILLION a year. She proposed funding this program by raising the marginal tax rate to a whopping 70% on every dollar over $10 million that any American earned. 

However, a simple calculation using public IRS data easily shows that such a plan would raise only about $50 billion a year at most, or about only 1.5% of the amount needed for the Medicare for All program. Thus, she has really, really bad math skills (highly likely given the gaffes we discussed above), she is lazy and did not do this simple calculation, or she is a liar, claiming that the rich would fund the entire program.

6-Prior to being sworn in to Congress but after being elected, she railed against Congressional members for still drawing a salary even though 800,000 Federal employees were not being paid during the government shutdown. However, once elected, she refused to not draw a salary, ducking press questions about her massive hypocrisy on the matter of berating those that took a salary in December but refusing to not draw a salary after she was sworn in in late January.

7-In a Twitter spat she had with a healthcare expert, she put forth the following tweet: “Actually, we have for-profit “death panels” now: they are companies + boards saying you’re on your own bc they won’t cover a critical procedure or medicine.” 

As always, she is talking about a subject she knows nothing about and has not done the research for. For starters, anyone with an Obama Care insurance policy has to have critical procedures and medicine covered. Second, According to the National Conference of State Legislatures: “There are more than 1,900 such statutes [statutes that guarantee medical coverage/treatment] among all 50 states; another analysis tallies more than 2,200 individual statute provisions, adopted over a 30+ year period.”

Do we have a health care issue and overall health insurance issue in this country? We certainly do, for a minority of citizens, but there is nothing close to being a set of death panels in this country being operated by greedy corporations, there are loads of safeguards to prevent death panels, safeguards that obviously do not exist in her world or mind.

Okay seven major faux pas and she has only be in office for about a month. Unfortunately, we have a whole folder of other bouts of idiocy and bad math that we will present over the coming weeks and months.

And while her gaffes may make us smile, given how out of touch she is with reality, sadly remember that she helps write and vote on legislation that affects all of us.

Never forget: "M.A.B.A. - Make Alexandria a Bartender Again" which would allow her to screw up a drink or two but not screw up the country or our freedoms.

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:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:


http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

July, 2018, Part 7, Political Class: Economic Ignorance In NYC, Rats Gone Wild In Chicago, and The Non-Threat From Russia

It is another month which means it is again time to review the latest political class insanity from Washington and around the world. Political class insanity takes many forms including the wasting of taxpayer wealth, criminal fraud within government programs, inane and stupid political quotes and actions, the inability to create and implement effective and efficient government programs, stupid and ill performing economic policies and strategies, and other forms of insanity that continue to evolve and surprise and shock us.

Let’s get started:

1) Sometimes you cannot believe what comes out of a politician’s mouth, it is that inane. Such is what happened recently to a co-called”rising star” of the Democratic party, a young lady from NYC, Alexandria Ocasio-Cortez. Ms. Ocasio-Cortez recently had a huge upset in a Democratic primary, beating a long time Congressman from that district.

This got a lot of liberals and Democrats all excited: a young woman, Hispanic, camera friendly, a millennial, all of the Democratic hot buttons pushed. She was dubbed by some as the future of the Democratic party which seemed a little premature since her only accomplishment was to win one primary.

It got really premature when she opened her mouth during a friendly interview that she granted. Keep in mind as you see what she said, that she supposedly has a degree in economics, which seems really hard to believe based on her understanding, or non-understanding, of a simple economic calculation, the unemployment rate:

• The host lobbed a softball question to her, citing the reality that the nation’s unemployment rate is very low, record setting lows in some places.
• The host then made the correct assertion that this was good news for working Americans.
• At which point Ms. Ocasio-Cortez made a complete fool of herself and her economics degree: “Well, I think the numbers you just talked about is part of the problem, right? We look at these figures and we say, ‘Oh, unemployment is low, everything is fine,’ right? Well, unemployment is low because everyone has two jobs. Unemployment is low because people are working 60, 70, 80 hours a week and can barely feed their kids.”
• She somehow thinks that if a person has two jobs, that helps drive down the unemployment rate which, of course is nonsense. 
• The unemployment rate is simply the number of people who are without a job and who are looking for a job divided by divided by the the size of the workforce, it has NOTHING to do with whether or not someone has two or three or more jobs.
• This from a supposedly college graduate with a degree in economics who cannot understand a simple high school economics class principle. Makes you wonder how bad her university's economic program is.

But her ignorance and/or lying gets worse:

• She says “everyone has two jobs” which of course is more nonsense.
• According to the Bureau of Labor Statistics, fewer than five percent of the U.S. labor force currently has two jobs, which means that more than 95% of American workers only have one job, hardly close to her assertion that ”everyone has two jobs.”
• What’s more, the percentage of Americans holding down two jobs has been steadily trending downwards over the past two decades.
• As far as “barely feeding their kids,” Michelle Malkin puts that nonsense to rest also: “As for starving children, government statistics show that hunger has dropped to its lowest levels in a decade as unemployment and food inflation have declined. Federal food stamp usage has also plunged to historic lows.”

Is she a liar, pushing her point of view on an unsuspecting public or is she really that ignorant of the realities of our times regarding how to calculate a simple, very basic economic statistic and does not know the realities of declining hunger levels and multiple job holders in the country? In either case, a liar or ignorant, hardly the future any political party should want for their future.

As a final note, Ms. Malkin does a better job of explaining this nonsense coming from Ms. Ocasio-Cortez than me: “The unemployment rate, which stands at a historically low 4 percent, is calculated by extrapolating and dividing the number of people out of work by the total number of individuals in the American workforce.

If you have one job, two jobs, three jobs or more, you don’t count as unemployed. Whether you are working 40 hours or 80 hours or 120 hours a week, if you’re working, that has no effect on the unemployment rate, either. The number of workers moonlighting and the number of hours they moonlight have zero, zip and nada effect on the unemployment rate.

Ocasio-Cortez’s claim that “everyone has two jobs” is more fake-o-nomics. The Bureau of Labor Statistics reports that the number of Americans holding down multiple jobs is less than 5 percent and has been declining for nearly 30 years. Pew Research adds that both “in terms of raw numbers and as a share of all employed people, fewer Americans are working more than one job than in the mid-1990s.”

2) We have recently discussed the reality that San Francisco has a human feces problem in its city, getting thousands of complaints a week of human feces showing up on the city streets because of the high number of homeless people in the city. Pretty disgusting stuff, but Chicago is not far behind San Francisco in disgusting health situations, as reported by Angie Leventis Lourgos in a recent article from the Chicago Tribune:

• A recent study by an organization called RentHop rated Chicago as the “rat capital” of the country.
• This dubious award went to Chicago based on the number of rat complaints registered in 2017 in four major U.S. cities.
• Chicago had over 50,000 rat complaints filed, Boston had almost 2,500, New York had just over 19,000 and D.C. had just over 5,000 rat complaints.
• Thus, the “contest” was not even close with Chicago have twenty times more complaints than Boston, ten times more than D.C. and two and half more than NYC.
• Even when adjusted for population size, Chicago is still the clear “winner.”
• Now to be fair, the Chicago Department of Streets and Sanitation said it actually received only 42,670 requests for rat complaints from residents in 2017 in Chicago.
• However, I doubt that made Chicago residents feel any better since the number is still huge and more than double the nearest competitor, New York City.
• Despite what the city says, the article quotes a Chicago veterinarian, Dr. Dylan Frederickson, who claims he has lived in other cities like Minneapolis and Madison, but has never experienced such a dense rat population before: “I’ve never seen anything like the rat infestation that we have in Chicago.” 
• He claims that he has had to treat pet dogs for leptospirosis which is a rat caused disease.

We mention this disgusting situation in Chicago to prove a point we have made often. Given that the city’s rat population is exploding, the south side of Chicago is a murderous place to be any day of the year with hundreds of innocent citizens gunned down in the streets every year, the city school system stinks, and the city is going bankrupt, just what do the local city politicians bring to the table as far as serving their constituents? It does not appear like they bring much except for high taxes.

3) We have often argued that today’s American politicians are more concerned about their careers and self enrichment than being in touch with Americans’ worries, issues, and concerns. This self centered approach to life and politics often has the political class totally out of step with what Americans what to see get done and resolved.

The following is just another example in a long line of examples of being out of touch. If you were to believe the mainstream media, liberals and Democrats, you would think that our relationship with Russia was the biggest crisis in the history of the Republic. They are actually out of control trying to find a way to prove that Russia is the ultimate enemy, in cahoots with Trump.

But is that the reality out in the country, away from D.C.? Are Americans also viewing Russia as the top issue in their lives? According to Gallup, not quite:

• Gallup recently asked Americans what was the most important problem facing America today.
• Not unexpectedly, economic issues were very important to Americans.
• But Gallup also listed out in rank order important issues in Americans’ mind that did not include economic issues.
• The top two issues, by far, in Americans’ lives are Immigration/Illegal Aliens (22%) and Dissatisfaction With Government/Poor Leadership (19%).
• No other non-economic issues garnered double digit results, Race Relations/Racism (7%) and Unifying the Country and Lack of Respect for Each Other, both at only 6%, coming in next.

And where did big, bad Russia come in relative Americans’ fears? The concern about Russia finished at less than one half of one percent, with 26 other issues ranked as more important than Russia. And yet, if you listen to the media, Democrats, and liberals it is by far the biggest threat to our country. So out of touch with the reality in America today.

That will do it for today’s and this month’s political class insanity. Washington still out of touch with Americans, rats going crazy in Chicago, and a totally ignorant and/or lying New York City politician. More insanity next month.

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:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:


http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w