☆ Shelley: is CA still worth it for investors? “Rapacious” tax policy could test the economy’s limits.
Sacramento and local governments have long relied on the glories of the Golden State to get away with “unpredictable” tax policy: HJTA’s Susan Shelley asks if Silicon Valley tech founders have finally had enough. In this Opportunity Now exclusive prediction, she warns of a “bumpy ride” in 2026 that could “shake up the status quo.”
As 2026 kicks off, it looks to be a year that will shake up the status quo. An overreach for tax increases, led by unions with the quiet acquiescence of state and local lawmakers, threatens to chase innovators and founders out of the state permanently. Does it seem that California’s many advantages will forever be enough to overwhelm the negative effects of rapacious and unpredictable tax policy? This is the year we may find out that nothing is forever.
Maybe you saw David Sacks on the All-In podcast in front of a background image of a beautiful sunrise over a tranquil valley with the title, “Galt’s Gulch.” He was giving away the ending of Ayn Rand’s epic novel, “Atlas Shrugged.” Probably nobody in the state legislature understood it. Silicon Valley founders may want to start a book club for elected officials. It’s not too late.
Another seismic wave that could shake up California is the effort by the Trump administration to end fraud in government programs and grants. The problem of “improper payments” is huge and growing. The tens of billions of dollars lost to fraud in the Employment Development Department represents just one small piece of the picture. Tens of billions in homelessness spending have now fallen under the U.S. government’s microscope along with the state’s inadequate verification of income eligibility for health benefits and SNAP payments, now “high-risk” programs as documented by the state auditor.
Expect a bumpy ride all the way to the midterm elections.
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