The reality one would think that most governments are acutely aware of the risk of capital and talent will flee when designing regulatory policies and targeting the rich and corporations for excessive taxation. The dynamic seems to be one of ignorance, or denial that their marxist goals are simply against human nature. The only politicians to have publicly admitted this was Democratic President Grover Cleveland who was chastising his own party for the unsound finance of the 1890s that led to the Panic of 1893. He understood that capital can flee to other jurisdictions, and what is left is a poorer state for the average worker cannot put their labor offshore.
Cleveland also saw reality that when a state demand taxes more than what is necessary, it become “ruthless extortion.” Indeed, this undermines representative government and kills the very think of equal justice for all and the basic principles of a “free government.”
As they say, you can lead a horse to water, but you cannot make him drink. The same is sadly true about politicians. Gavin Newsom and the Democrats are completely destroying California all for their Marxist beliefs and sheer stupidity. Now Zuckerberg is moving to Florida. California’s total taxable wealth from billionaires has now plummeted to well under $1T from over $2T just a few weeks ago. No matter how many times you can show them what happens, they refuse to listen. We are watching the same stupidity taking over NYC. They are always in denial and want to believe in their Marxist dreams of Utopia. The refuse to comprehend that this is why China and Russia discovered the hard way that these philosophies do not work.
These were all people that were paying 13%+ in state income tax every year WITH NO COMPLAINTS UNTIL A FEW WEEKS AGO. Imposing a one-time 5% wealth tax would force then to liquidate assets for their wealth is not cash. Having to sell stock of that magnitude could even cause them to lose control of their companies. Here are just some major companies that have left California and where they went:
McKesson (Texas),
Chevron (Texas),
Oracle (Texas),
Tesla (Texas),
Playboy (Florida)
In-N-Out Burger (Tennessee)
John Paul Mitchell (Texas)
Realtor.com (Texas)
After 50 years, the Anheuser-Busch, the world’s largest brewery, is also closing its facility ending production in California. That will layoff nearly 240 employees.
California’s debt position has deteriorated from concerning to genuinely dangerous, representing one of the most significant sub-sovereign credit risks in the developed world. The state’s total debt obligations—when properly accounting for unfunded pension and healthcare liabilities—now exceed $1.5 trillion against a state economy of approximately $3.9 trillion. This debt-to-GDP ratio of nearly 40% would be alarming for a national government; for a state without monetary sovereignty, meaning it cannot print its way out of debt, it is approaching crisis territory.
The Official Debt Understates Reality
California’s official general obligation bond debt stands at roughly $80-85 billion, which appears manageable against the state’s $300+ billion annual budget. However, this figure is deliberately misleading, representing only the tip of a massive fiscal iceberg. Chasing out companies and now billionaires, it is becoming only a question when will the debt crisis hit not if.
You certainly do not want to own California debt. Face reality, and move on. And Gavin Newsom want to leave the country?