☆ Connolly: in 2026, will an “endless appetite for new taxes” meet voter fatigue?
Lower tariffs combined with an improved regulatory environment could be good for business this year, says Shane Patrick Connolly. Locally, however, he wonders if voters will finally push back against Santa Clara County’s “moribund” yet tax-ravenous government. An Opportunity Now exclusive forecast for 2026.
Economically, I am hoping that some of the trade uncertainty calms down. I think the trade deals will work themselves out. As those deals are finalized, that creates more certainty and people feel more comfortable about the future. Also, if tariffs are settled at lower levels, then that is less tariff that gets passed on to the consumer. The regulatory environment has improved, and that’s good for business.
Locally, people are concerned about affordability, and there seems to be an endless appetite for new taxes in our local government here. The county just passed another tax increase. For some reason, voters believed the stories of calamity that will ensue if we don’t give more of our money to our moribund county government, and yet there is probably rampant fraud and abuse of taxpayer dollars going on, but no one seems to ask any questions about it. We need a DOGE for local government and these other multi-government agencies like VTA, because there is a lot of waste and probably fraud. Every time they pass one of these new taxes or they impose a new regulation, it harms affordability. I don’t think people are making that connection.
My quick prediction is that if a regional transportation measure does make it to the ballot, I think the voters are getting tax fatigue, and I think that it will fail. Even if they get the numbers right, it’s not going to substantially improve service or the lives of the taxpayers. They have enough money already to do the things they want to do. They just need to allocate that money properly. Our governments need to do the same thing each person does in their household budget: prioritize.
Lastly, I’m sure we’re going to see [layoffs] continue as AI gains greater usefulness and is more prevalent in day-to-day operations of these companies, because the companies on the cutting edge of using AI will eventually be able to displace some of their labor with automation. That’s something to be both happy about and concerned about. Eventually, this benefits the broader economy as efficiency gains explode. It could be the next major shift: there was the Industrial Revolution, and then the technology revolution, and now AI and robotics.
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