The Blue-State Hurricane

Californians are on edge anticipating the highly unusual event of a hurricane possibly slamming its shores this weekend, courtesy of El Niño’s sweaty tropical weather. No one knows what, or if any, damage will be done. The same can’t be said for the fiscal hurricane about to hit California and other blue states as they continue to enact insane woke laws, raise taxes, pile up regulations and drive successful businesses out.

Long after the current spell of bad weather, blue states across the country will still continue to suffer the hurricane-like damage of their own fiscal mistakes.

It’s a sad story. Americans are leaving blue states in droves, a result of the foolish and economically destructive policies imposed by leftist Democrats.

Our good friends at the Unleash Prosperity have the data in a neat visual package:

“The big losers: New York, Illinois, Alaska, New Jersey, and California,” Unleash Prosperity notes. “All very high-tax states except for cold and remote Alaska. California’s solution to all the money leaving is to impose a wealth tax on its citizens. Brilliant.”

Brilliant, indeed.

Of the five states that have lost the most personal income from people moving to other states, four are ranked in the top 11 for total tax burden, according to a study by WalletHub: New York (12.4%), Illinois (9.9%), New Jersey (9.5%), and California (9.2%).

Alaska? It’s a demographic outlier. It has no state income tax, and finishes last in overall tax burden. But it also has no net new babies, and all the baby-boomers that fueled its oil-fueled population boom in the 1970s, 1980s, and 1990s, are now dying off or retiring to warmer climates.

Note, too, that all of the blue states on the list are near the top in terms of cost of living: California (49), New York (48), Alaska (46), New Jersey (45), and Illinois (24).

None of this includes regulatory burden and such things as quality of life. For example, as anyone in California can tell you, the overall quality of life in its two most prominent cities — Los Angeles and San Francisco — has declined sharply in the past two decades. It’s not getting better.

But what is the fiscal hurricane we speak of for these states, continuing the metaphor? It is of course that as hundreds of businesses and higher-income families leave the costly, high-tax blue states, their ability to fund those states’ lavish social programs, grandiose public works projects, and generous support for illegal aliens diminishes sharply.

Unlike the federal government, states can’t run budget deficits. There’s no Treasury Department to sell their debt, nor any Federal Reserve to buy it. With soaring interest rates, the squeeze on states to raise money will be intense. No one’s income will be safe. So they’re now heading for the doors.

This can already be seen in California, where far-left Democrats are pushing an extreme “billionaire tax” that turns out to be Carte Blanche for tax hikes on everyone and anyone to keep the California casino open. And just like a casino, as long as their suckers (taxpayers) have more money, California’s quasi-permanent Democratic Party government (they “reformed” California’s election system so Republicans can’t win elections anymore) will rake in more tax money as the state continues to go downhill.

And this hurricane, in fact, has hit not just California, but all of the blue states.

Unleash Prosperity estimates that roughly $2 trillion in total income left blue states from 2012 through 2023 (and more continues to move), with Florida ($1.3 trillion in income), Texas ($371 billion), along with a handful of other red states such as South Carolina, Tennessee, and Idaho sucking up most of the rest.

“Taken together, the numbers paint a dramatic picture: wealth draining out of long-dominant coastal powerhouses and surging into lower-tax, business-friendly states across the South and Southwest, and the shift may only be accelerating,” wrote the LizPeek.com website earlier this year.

That pretty much hits the nail on the head. Rarely has there been such a massive fiscal reordering of priorities in a single nation in such a short period of time.

And, once again, if you need an example, California is the posterchild for fiscal misadventure and irresponsibility (though New York is a grand example, too).

As the American Greatness website recently wrote:

While California is the fifth-largest economy in the world, its days of being a business haven have long passed. More and more, companies big and small are forced to either shut down or move to a more business-friendly state. Take, for instance, the departure of Fortune 1000 companies like Tesla, Oracle, and Hewlett Packard Enterprise, or a recent survey of CEOs ranking California as the worst state in which to do business. Things have gotten so bad that even providers of critical municipal services have been forced to stop doing business in the state. And in Los Angeles, the city may soon become a giant Skid Row, a dumping ground in every way.

This is the largest, wealthiest state in America, essentially surrendering to financial entropy. Its tale of high taxes, excessive regulation, punishment of success, and rewarding of illegality will be a lesson for decades, if not hundreds, of years.

California runs perpetual budget deficits, then uses fraudulent gimmicks to pretend its budgets are “balanced.” Demographically and financially, California is bankrupt. Other blue states that follow California’s failed model are having the same result.

— Written by the I&I Editorial Board

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