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VIEWPOINT - Tax, spend, and overregulate is a California political elitist addiction. Just as with certain addicts, the only bottom to their disease is death, the California legislature is intent on killing the state’s finances through usurious taxation and uncontrolled spending. While exercising less oversight on how the money is spent than a naked mole rat would. Like all addictions, it escalates, denies consequences, and punishes anyone who refuses to enable it. For the California Legislature, there is no such thing as enough. No tax is too high, no regulation too dense, and no project is uneconomic to pause the ever-widening fiscal damage and theft from the public coffers.
The result is not progressive governance. It is accelerating economic self-harm and the destruction of California dreaming. Not even the Golden State’s superior climate on a winter’s day can make up for the harm the legislators inflict on business, property owners, and citizens. For they are beholden to the unions and the donor class, who demand a legislative payback, and it is a plague of bad governance that we ordinaries may never recover from.
For what has left the State, like Chevron, Oracle, Tesla, Valero, HP, Schwab, and SpaceX, will never return, as the current political class has shown it cannot be trusted to make decisions in the public interest or even keep the vital economic interests of the State intact. Total businesses leaving: >13,000 (2016–2025 est.).Their greed and lust for control resemble the Nuckelavee, a mythical creature whose mere presence brings ruin to the land wherever it roams.
Because every year, Sacramento piles new taxes and mandates onto a shrinking base of residents and businesses still trapped by jobs, family obligations, or not having enough dough to get up and leave. And as people leave, the burden on those who remain intensifies. It is the cannibalization of the existing base of shrinking taxpaying entities.
California now operates under what can only be described as regulatory self-asphyxiation. The state code contains more than 420,000 regulatory constraints, laws, mandates, rules, and regulations. an amount so vast that even Google concedes it is impossible to calculate how many rules a given business must comply with. Compliance depends on industry, size, geography, labor classification, environmental exposure, and political fashion.
This is not complexity born of necessity. It is bureaucracy playing God with the free market. The predictable outcome has been a mass evacuation. Yet Sacramento’s response to this migration has not been introspection or deescalation its response is to double and triple down like a pathological gambler. If people can still barely afford to live here, the empirical evidence shows to the wokeian ideologues that taxes are not high enough yet.
Having already imposed the highest state income tax in the nation, California’s political class now wants more not from income, but from your accumulated estate, your very existence. If it were possible to tax your breath, they would charge you for every breath you take.
Backed by its most powerful union allies, Sacramento operatives advanced a proposal to impose a one-time 5% tax on billionaire net worth, not on realized gains or income, but on assets frozen at a single point in time. Liquid or illiquid. Public or private. Appreciated or not.
This is not taxation. It is an asset seizure with better branding. Soak the rich and happy days will be here again. The defenders insist it would raise $100 billion. What they do not say, because it ruins the story, is that wealth is mobile, and capital does not wait around to be audited into extinction. The mere threat of the tax triggered a stampede of ultra-high-net-worth residents out of California, vaporizing future income, capital gains, and philanthropic funding that would have dwarfed the fantasy revenue over time.
Capital does not moralize. It migrates. High-profile corporations relocate. Energy companies, manufacturers, and technology firms are not symbolic protests. These are hurricane warnings that strip states of executive income taxes, high-wage jobs, local spending, corporate taxes, and future expansion. Even partial exits weaken municipal tax bases already stretched thin and bleeding red ink.
While Sacramento plots new ways to soak the rich, the state’s balance sheet tells a far more dangerous story. California’s total public-sector indebtedness now exceeds $1.37 trillion. That figure alone should trigger a fiscal reckoning, and it probably understates the real amount of debt.
State and local governments collected $828 billion in FY 2024, yet their obligations balloon faster than revenue. Bonded debt is only part of the picture. Adding $664 billion in unfunded pension liabilities and $175 billion in retiree healthcare obligations can never be discussed openly.
Several local agencies, including major jurisdictions in Los Angeles County, now carry debt loads exceeding 200% of annual revenue, driven largely by unsustainable public safety retirement formulas. This is not an investment in public safety; it is political payback.
On a per-capita basis, California’s liabilities total $35,000 per resident, depending on the accounting method used. No vote was ever taken to assume this burden. It simply accumulated, one bad bill and policy at a time, quietly, by a simple majority vote, and without consequence to the sponsor of such legislation. Those in power who have put California into this tailspin of insurmountable debt have an unusual ability to fail upward into positions of greater authority. So don’t expect a reduction of tax liabilities in your lifetime.
California’s defenders insist the economy remains large. That is true and irrelevant. Size does not equal antifragility. What matters is marginal behavior, and at the margin, California is bleeding high earners, entrepreneurs, and decision-makers. Extreme bureaucratic regulatory oppression and wealth confiscation: moving capital allocation from highly competent entrepreneurs to incompetent government will strangle growth and innovation. The ultimate conclusion of this scenario is that there will be no wealth in California to reallocate.
Sales-based corporate taxation has delayed the reckoning, but it cannot prevent it. When executives leave, income tax receipts fall. When investment slows, capital gains disappear. When energy companies shut down refineries rather than comply with an ever-stifling green agenda, losses compound, and expenses will rise.
Sacramento’s answer is always the same: tax those who stay even more. As if sky-high housing costs, fuel prices, and income taxes were not enough, legislators now propose a per-mile driving tax that punishes residents for the audacity of mobility. The mileage tax will also hurt the least fortunate among us the hardest, for example, a minimum-wage earner who needs a car to get to their job.
The underlying assumption is that Californians are an inexhaustible revenue source that can be squeezed indefinitely. That assumption is false and increasingly dangerous to the State’s fiscal well-being.
None of this is accidental. California governance is shaped by a self – reinforcing cycle between uber-rich leftist donors, public-sector unions, and Democratic political control. Unions and billionaires fund campaigns. Legislators deliver benefits to them. Costs are deferred, hidden, or externalized onto future taxpayers who never voted for them. Every proposed tax is sold as temporary. Every obligation is framed as manageable. Every warning is dismissed as fearmongering and not being caring enough.
At that point, Sacramento will not reverse course. It will double down. New taxes. New fees. The addiction to spending and fraud demands it. The additional taxes and fees are needed not because they will make anything better, but because it is expensive to maintain the deceit and misconduct. Potential whistleblowers need expensive care and tending because they can bring down the whole mighty edifice. Once you're out of power, people have short memories for all the political favors you handed out; you could actually become liable for the misappropriation and lack of transparency surrounding the tax dollars squandered and placed in inappropriate pockets.
The only unanswered question is whether voters recognize the pattern before California becomes a debt pariah. In addiction, there is always a bottom, so it will be in public finance, and California is getting closer each tax year. Beware the wrath of Moody’s, Fitch, and Standard & Poor’s when they wake up to Califraudia dependency on grifted dollars. Who, in turn, should fear the institutional (bag-holder) bondholders with their billions of downgraded municipal bonds? Can the debt be repaid? Stay tuned!
(Eliot Cohen has served on the Neighborhood Council for 12 years, served on the Van Nuys Airport Citizens Advisory Council, is on the Board of Homeowners of Encino, and was the president of HOME for over seven years. Eliot retired after a 35-year career on Wall Street. Eliot is a critic of the stinking thinking of the bureaucrats and politicians that run the County, the State, and the City. Eliot and his wife divide their time between L.A. and Baja Norte, Mexico. Eliot is a featured writer for CityWatchLA.com.)
