Let’s check in with our discussion on which city or state government is going to 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. Let’s see what is going on in the newest and possibly the strongest contender for bankruptcy court.
1)An old saying goes as follows: "When stuck in a hole, stop digging." When businesses and residents are fleeing your city or state because of high taxes, probably the best first step is to stop increasing current taxes or introducing new taxes.
Apparently, that message has not gotten through the thick skulls of California politicians, a prime state to go bankrupt as residents and businesses leave the state, diminishing the state government tax revenue stream:
California motorists currently suffer from the highest gas tax burden in the country and sky high DMV registration fees while driving on some of the worst maintained roads in the country.
On top of those burdens, the California Energy Commission has suggested that new rules be adopted for replacement tires that would make about 70% of the current vehicle tires on the market ineligible to be sold in the state.
Drivers would have to purchase tires that are more expensive under the proposed guidelines.
Theoretically, the tires that would be required would be more fuel-efficient and better from a safety perspective.
However, how much more those tires would cost and how much fuel they would save is open to debate among parties involved in the tire business.
Of all the problems the state is facing, out-migration of businesses and residents, high crime rates, high homeless rates, massive fraud in government programs, bad roads, bad education system, unfunded financial liabilities, etc., why is reducing the variety and increasing the cost of replacement tires even on politicians' agenda and priority list?
So the state government will go bankrupt but at least the drivers left in the state will have fuel efficient tires. Great.
2)But the motor vehicle tax revenue insanity in the state gets even worse:
A recent state government budget item quietly allocates motor vehicle registration money to be used to pay for security details for state politicians long AFTER they have left office.
California taxpayer motorists have already funded Kamala Harris’ security staff during her book tour last spring.
Once Gavin Newsom leaves office and starts his Presidential campaign, California drivers will be subsidizing his security details also even though he will be a private citizen worth tens of millions of dollars and who can easily afford to fund his own security arrangements.
According to the budget line item, this cost to protect former politicians will run about $20 million a year.
California Highway Patrol officers would be taken off their duties to protect the citizens and businesses of the state and be used to staff security details for former politicians.
More expensive tires and more expensive vehicle registration fees being used to protect wealthy former politicians on top of high gas taxes and high DMV registration fees. The taxes just keep on coming and the residents and businesses who no longer want to live under such heavy tax burdens keep on leaving.
3)Thank goodness there are no other ways to gouge California motorists out of their money. But wait, maybe there is another way to get blood out of a rock:
California Democrats in the state government want California drivers to pay a so-called “mileage tax.”
Thus, in addition to sky high gas taxes, high motor vehicle registration fees, more expensive tires, and the diverting of registration fees to pay for security for former politicians, the new tax would assess a per mile tax for state drivers.
Their new tax would likely be between six and nine cents a mile driven.
Thus, a new annual fee for drivers could range from $900 to $1,350 if a driver drove 15,000 miles a year.
The Reform California organization estimates that a typical California family with two cars could end up paying over $4,000 in mileage fees a year.
This would be on top of the $.90 a gallon in taxes and fees California drivers pay for every gallon of gas they use.
The amount billed for mileage would be calculated in one of two ways.
Drivers could agree to have a GPS tracking unit in their car that would report their mileage or every year they could go to a state DMV location to have their odometer read.
And the other scary part of this planned new tax is that Democrats have a super majority in the state government which means that taxpayers will have no say in whether or not this new tax gets implemented, Democrats in the legislature can do it without permission of those that will be impacted.
The impact of this fiasco is not just that drivers will pay more. The visiting nurse that visits sick and shut-in customers will see her costs go up over $1,000 a year, an increased cost she will likely pass onto her customers. The Door Dash and Uber Eats drivers will see their operating costs go up and will pass those increased costs on to their customers. The ripple effect will affect everyone that is still in the state,
whether they drive a car or not.
So, folks are fleeing California because of high costs of living and taxation and what do California politicians do: they layer on three new taxation schemes, more expensive tires, diverting motor vehicle registration fees to protect bygone politicians, and taxing every driver in the state on mileage.
Hey, state politicians, listen up: “when you are in a hole stop digging.” When excessive taxation is drying up your tax revenue steam, at least stop with the new taxes.
All of which confirms that the state government of California hasn't learned any lessons and will continue to be a strong contender for the first state government to go bankrupt.
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Vote Now!!!! Go to to the following link and vote on which state or city government you think will go bankrupt first:
https://www.facebook.com/profile.php?id=61592458935721
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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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