We are going to take a little break from the past several posts which showed the disgusting waste of taxpayer wealth that is criminally siphoned off from Medicaid, Covid, and other government programs. Instead, we will update some of the latest news and probabilities on what states and cities are likely to go bankrupt first.
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)We have previously discussed the insanity of the “one time” “billionaire tax” that California politicians want to impose on their richest and highest tax paying residents. In theory, this one time tax of 5% on any wealth valued at over $1 million would be hit. This tax is insane from a couple of different perspectives:
What is wealth and how will it be defined, e.g. does it include the equity in one’s house, does it include stock shares that have not been sold, etc.? It is not like a 1099 or other IRS tax form is going to nicely categorize wealth.
The proponents of the tax say it is necessary to fill a one time budget gap. But won’t that budget gap happen year in and year out if faulty, stupid, and inefficient government spending and programs are not fixed?
Apparently the voters have to approve the tax assessment per California law in the November election. But hidden in the draft of the law is the availability to future California politicians is the sneaky ability to adjust that $1 billion threshold in the future. Thus, it could be a billion dollar threshold today but a lower level in the future and changing it to a lower level would not require voter approval, given the hidden clause in the initial roll out of the legislation.
And the real proof of the insanity of this concept is the reality that many California billionaires have already moved out of the state to avoid this wealth tax, taking their other tax dollars and their economic power with them to low tax states like Texas and Florida. Thus, whatever money the creators of this tax thought they were going to get gets lower and lower every day every time a billionaire leaves the state.
A recent article from the Steadfast Daily website puts some of this insanity into perspective:
A new analysis by the Stop The Squeeze campaign has quantified some of the severe downsides of this wealth tax.
The analysis predicts that as billionaires leave the state they will be taking their businesses with them along with the jobs those businesses create.
They estimate that this out migration of billionaires and jobs will total over 108,000 lost California based jobs.
Those jobs will be taking about $28 billion in lost wages with them, wages that other California tax platforms can no longer tax.
The analysis goes on to predict if the legislation is passed, at least 40 billionaires will leave the state, taking $2 TRILLION in wealth with them.
According to the Steadfast Daily article: “When high-net-worth individuals relocate, the report argues, companies often follow or scale back operations, leading to fewer jobs, reduced consumer spending, and diminished investment in future growth.”
The report predicts that this out-migration of billionaires and the employees and companies they take with them will reduce the state government personal income tax base by about $12 billion annually by 2046 or about $122 billion over the next 20 years.
So whatever the state government gets from the wealth tax has to be reduced by the taxation dollars it will lose from other taxes simply because the tax base has shrunk.
Is this a valid analysis, are these valid predictions? Who knows, but the reality is that many billionaires have already left the state before knowing if the tax will be passed and put in place so the damage from just talking about the tax is already done and cannot be undone.
Thus, our continued view that California continues to lead the way of all state governments in the race to bankruptcy court.
2)In a recent post we listed out many of the companies that have moved major portions of their operations and employees or all of their operations and employees out of the state of California to Texas. That post can be reviewed at:
https://loathemygovernment.blogspot.com/2026/05/the-race-to-bankruptcy-court-mamdani.html
The list of companies is impressive: Yamaha, Chevron, Toyota, Tesla, Charles Schwab, Hewlett Packard Enterprise, and a host of other large,medium and small sized businesses that have already taken their company employees, and tax base to Texas.
But Florida has also been a haven for businesses fleeing New York, New Jersey, Illinois, and California. Given their non-existent personal income tax, lower business taxes and business regulations, and better quality of life, Florida has been absorbing a large number of people and companies. Recently, Florida announced another big fish that it has reeled into residence in the Sunshine State:
D-Wave Quantum is leaving Silicon Valley in California and heading to Florida.
They will be bringing hundreds of high paying jobs to Boca Raton, Florida.
According to D`Wave CEO, Dr. Alan Baratz:“Florida represents one of the fastest growing technology ecosystems in the United States, and as such it was the ideal choice for our new corporate headquarters and U.S. R&D facility. The state offers a rich scientific and educational environment, a growing pool of highly skilled people. With our new headquarters in Boca Raton, D-Wave will bring to South Florida incredible opportunities for advanced research, talent recruitment, and high-impact technology development that is shaping the future of computing.”
What is critical to the bankruptcy financial death spiral that at least California finds itself in, as more and more tech companies leave California, the need for people in the tech industry to work in California diminishes. As Dr. Baratz pointed out, Florida “offers a rich scientific and educational environment, a growing pool of highly skilled people.”
In other words, Silicon Valley and California are losing their near monopoly on tech businesses and tech talent. Thus, new and existing companies now have options that will allow them to more easily compete and possibly beat California tech companies, a reality that did not exist until recently.
3)And if two billionaires have their way, D-Wave will not be the last company to leave California, New York, New Jersey, or Illinois and head to Florida:
Ken Griffin and Stephen Ross are two U.S. billionaires living in Florida.
Apparently they like living in Florida since they recently put $10 million into an effort called Ambition Accelerated.
The sole purpose of this effort is to convince CEOs and business leaders to move their operations to Florida.
At a recent conference in West Palm Beach, Florida they were selling the reasons for companies and people to move to Florida’s Gold Coast, a stretch from Palm Beach to Miami.
They touted the state’s low taxes, business-friendly policies, and great quality of life.
Griffin started his company in Chicago and Ross started his in New York City, two states and two cities that are at the top of our list for more likely to go bankrupt first but they eventually moved their operations to Florida.
According to Mr. Ross’ comments at the conference: “Florida really answers all those things that people are looking for. I think this is a place that is about to explode.”
Their effort offers consultations with people either looking to move an existing business to Florida or starting a new business in the state, highlighting the reality that employees would not have to pay a state income tax.
Since moving to Florida, Mr. Griffin has personally donated millions of dollars to healthcare and education efforts in Florida.
The host of the conference referenced above was the Wall Street Journal and its CEO, Almar Latour, said it was not a random act that the conference was held in Florida: “So many captains of industry have set up shop in this region. Private equity, venture capital, banking, hedge funds, wealth management, crypto. At least 115 billionaires now call Florida home.”
More proof that Florida is the big winner as the favored states continue to drive their states to financial ruin with high taxes, excessive business regulations, lower quality of life, and out-migration of residents and businesses.
4)While New York, California, New Jersey, and Illinois along with New York City, Chicago, Los Angeles, and San Francisco have always been our favorite picks to go bankrupt first, the state of Washington and the city of Seattle are also in the running for bankruptcy:
Washington state government politicians have recently violated their own state constitution by passing legislation that will assess a new tax on million dollar earners.
Billionaire and Amazon founder Jeff Bezos has already moved out of the state to lower taxation state Florida, just one of many wealthy folks that have left.
Seattle already has one of the highest city tax burdens of most other cities.
The Seattle mayor, Katie Wilson, recently insulted millionaire taxpayers in the city when she was asked if millionaires were leaving Seattle she offhandedly and condescendingly said “Bye.”
And a recent announcement by the city’s largest employer makes the situation worse for both the city and the state:
Rather than expand business operations in Seattle, Starbucks recently announced that a major expansion of its corporate footprint will be in lower cost Tennessee.
The Washington Policy Council estimates that the state government will lose $750 million in tax revenue over the next twenty years as a result of the Tennessee move.
Starbucks expects to invest $100 million in its Tennessee operation which will place 2,000 jobs in Nashville, not in Seattle.
The real kicker is that Starbucks estimates that it will save a staggering $12,000 per employee a year by going to Tennessee.
Starbucks has called Seattle home since its funding in 1971. And yet, that history and tradition took a back seat to economics and business profitability when it came time to expand operations. Thus,Washington state and the city of Seattle are still viable candidates to go bankrupt due to the economic and business ignorance of their politicians. They are viable but at this point long shots given the insanity of the politicians in the cities and states listed above.
California is still losing, Florida is still winning, and Washington is making a move in the race to bankruptcy.
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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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