- The state politicians have run up hundreds of billions of dollars in unfunded financial liabilities that at some point in time will either cost Californians even heavier taxation or drive the state government into bankruptcy.
- State residents are some of the heaviest taxed Americans in the country with an unreal top state income tax marginal tax rate at over 13%.
- Even though Californians pay, on average, about 55% more for electricity than the rest of the country, they have to suffer through periodic rolling electricity blackouts because the state’s politicians have forced more and more of the state's electricity be created by unreliable solar and wind power sources.
- Bad environmental laws and regulations have caused massive forest fires over the past couple of years.
- California has some of the highest poverty rates in the country.
- California’s public schools do a horrible job educating their kids.
- By far, the state has more homeless people than any other state, e.g. there are 66,000 homeless Americans wandering the streets just in LA County alone.
- State cities have made it not illegal to defecate, urinate, or shoot up illegal drugs in public which has drastically reduced the quality of life in many state cities.
- High taxes and lower quality of life has caused many Californians to leave the state, taking their tax dollars and jobs with them.
- Since 2005, more people have left California then who moved into the state, the first time that has ever happened.
- Since 1990, migration in California has averaged -225,000 residents a year, i.e. on average 225,000 moved out of the state then moved into it.
- According to a recent CEO survey, California is the most challenging and difficult state to do business in.
- Crime rates in the state are going up quickly and yet state politicians continue to “defund the police” which results in more crime and more criminals getting away with their crimes.
- The state government’s attempt to build a high speed rail line in the state crashed almost immediately after beginning, wasting millions and millions of taxpayer dollars without accomplishing anything except showing how inept state politicians and bureaucrats are.
- Idiotic housing laws and regulations have resulted in an extreme affordable housing supply deficiency in the state which has not just impoverished those that can barely afford the expensive housing but also contributed to the huge homeless problem of people who just plain could not afford housing in the state and ended up on the streets.
One of the best descriptions I ever heard of California is that it is now just “North Korea with a tech industry.” In other words, the state is being kept afloat financially because the Silicon Valley billionaires and their high flying companies have kept some tax money flowing into the state government, where, of course, it gets squandered by the state politicians. Take away the rich tech leaders, take away their rich companies and all of a sudden, the tax stream of the state goes down the drain, leaving behind nothing but...another North Korea who lost its tech industry.
And do not think this scenario is not starting to materialize:
- Joe Rogan is one of the most famous podcasters in the world and was recently given a ten year, $100 million contract by Spotify.
- Mr. Rogan is now a former California resident since one of the first things he did was move to Texas, a state without a state income tax, because if he had stayed in California, that $100 million contract would have cost him about $13 million in California state income taxes.
- Obviously, the move was a financial no brainer since Texas has no state income tax.
- Ben Shapiro is a famous conservative pundit.
- He grew up in California, went to college in California, met and married his wife in California and started a family in California.
- Nevertheless, he recently moved his business and family out of California to Tennessee.
- The reason for moving was totally logical: “We’re leaving because all the benefits of California have steadily eroded — and then suddenly collapsed. Meanwhile, all the costs of California have steadily increased — and then suddenly skyrocketed.”
- He also referenced the financial death spiral syndrome that we have talked about many times: “It can be difficult to spot the incremental encroachment of a terrible disease, but once the final ravages set in, it becomes obvious that the illness is fatal. So, too, with California, where bad governance has turned a would-be paradise into a burgeoning dystopia. The most beautiful areas of Los Angeles, from Santa Monica beach to my suburb, have become wrecks. My children have personally witnessed drug use, public urination and public nudity. Looters were allowed free reign in the middle of the city during the Black Lives Matter riots; Rodeo Drive was closed at 1 p.m., and citizens were curfewed at 6 p.m. I want my kids to grow up safe. I want them to grow up in a community with a future, with more freedom and safety than I grew up with. California makes that impossible. So, goodbye, Golden State. Thanks for the memories.”
- Billionaire Elon Musk of Tesla and Space X fame also recently made the move out of California, both as a resident and as a business person.
- He is building a truck factory in Texas rather than invest in California, keeping high tech, high paying jobs and tax revenue in Texas, and has publicly stated that he was tired with the overbearing politicians, government and regulations in California.
- Oracle is another Silicon Valley tech company that has recently decided to move its headquarters out of California.
- Chairman Larry Ellison of Oracle: “Oracle is implementing a more flexible employee work location policy and has changed its Corporate Headquarters from Redwood City, California to Austin, Texas. We believe these moves best position Oracle for growth and provide our personnel with more flexibility about where and how they work. Depending on their role, this means that many of our employees can choose their office location as well as continue to work from home part-time or all of the time. In addition, we will continue to support major hubs for Oracle around the world, including those in the United States such as redwood City, Austin, Santa Monica, Seattle, Denver, Orlando and Burlington, among others, and we expect to add other locations over time. By implementing a more modern approach to work, we expect to further improve our employees’ quality of life and quality of output."
- More jobs and tax dollars leaving California.
- Earlier this month, Hewlett Packard Enterprise also announced it was moving its corporate headquarters to Texas: “HPE has made the decision to relocate its headquarters from San Jose, California, to Houston, Texas. HPE’s largest U.S. employment hub, Houston is an attractive market to recruit and retain future diverse talent, and is where the company is currently constructing a state-of-the-art new campus. The Bay Area will continue to be a strategic hub for HPE innovation, and the company will consolidate a number of sites in the Bay Area to its San Jose campus. No layoffs are associated with this move.”
- More jobs and tax dollars leaving California.
- Toyota had previously moved its headquarters out of California to Texas, driven a lot by its employees complaining about the high housing costs in California.
- More jobs and tax dollars leaving California.
- Other California companies to recently move themselves and their employees out of California include, but are not limited to, McKesson, Core-Mark Holding Co., and Charles Schwabb.
- More jobs and tax dollars leaving California.
People want to be free and a large part of being free is 1) being able to keep their hard earned wealth and 2) not having some politician and government bureaucrat constantly adding to lists of things that they cannot do. Economic freedom allows people the freedom to send their kids to better schools, freedom to choose from a larger variety of lifestyles, contribute more to their favorite charities, save money to possibly start up their own business, etc. The high taxes across the board in California make that freedom shrink in direct relationship to the higher and higher taxes.
But the insanity, insensitivity, and ignorance of these principles and the actions that are reducing the state government’s ability to function financially are lost on California politicians. That is why I believe that California, along with Illinois, New York, and New Jersey, could very well be the first state in our history to go bankrupt. You cannot keep losing your tax base, suffer an ever growing out migration of businesses, residents, jobs, and tax revenue, while not cutting spending, and expect to not go belly up financially. The financial death spiral in California has already started and nobody in the state political class seems to have noticed.
North Korea without a tech industry, it is getting more and more likely everyday that will be the future of California, thanks to a political class bent on socialism and the denial of 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:
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
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