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PERSPECTIVE - Ironic, isn’t it, that March 28th, No King's March, targeted Donald Trump? Despite holding great executive powers, he has been limited by Congress, which has done virtually nothing during his first year and a half in office, by the courts, which have overturned executive orders left and right, and by public opinion, which has checked his power. Protests were even funded in London, where they are ruled by a king; the irony of reality is unmatched.
For more than two decades, California has operated under effectively one-party rule, (our kings), and the results are now unmistakable. We have handed over city governance to a coalition of political insiders, public-sector unions, and ideologically driven activists, including groups like Democratic Socialists of America (DSA), whose policies have steadily undermined public safety while aggressively pushing to defund and weaken law enforcement. At the same time, they have layered on endless fees and regulatory burdens, taxing residents into oblivion, while imposing increasingly rigid environmental rules that often do more to stifle economic activity than to meaningfully improve quality of life.
The net effect is a system that squeezes working and middle-class Californians from every direction, leaving them poorer, less secure, and increasingly voiceless, while those at the very top remain largely insulated.
2026, California stands as a cautionary monument to the systemic collapse of the social contract. As the state grapples with a staggering projected budget deficit ranging from $45 billion to over $70 billion, the prevailing political narrative is that high taxes are the necessary price for a progressive utopia. However, the reality is that Los Angeles has become a patchwork of homeless encampments, crumbling roads, expensive housing, massive unfunded liabilities, a failed school system, and outbound migration.
California currently takes more from its productive citizens than nearly any other state in the nation, yet it consistently provides less in return. This is no longer a debate about competing ideologies; it is a proven failure of competence (due to equality of outcomes), accountability, and the very legitimacy of a governing class that has protected itself from the consequences of its own disastrous policies.
The California fiscal strategy has fallen into a predatory cycle: taxing everything that moves and then taxing it again. Residents bear the highest income and sales taxes in the country while paying the highest gas prices in the continental United States. The government’s usual defense, that it lacks enough revenue to address complex issues, is clearly false. California does not face a revenue problem; it faces a severe misallocation of resources, a lack of accountability, and a lack of consequences—issues rarely seen on such a scale in modern history.
Think about Los Angeles, a city with an annual budget of over $14.1 billion. Even with this huge amount of money, the city still struggles to maintain basic infrastructure, address a visible and still-growing addiction and mental illness problem, or provide reliable public services. Instead, tens of billions are quietly consumed by long-term obligations, pensions, and debt, effectively cannibalizing the next generation's future. What is left after that is funneled to useless NGO's who have no incentive to mitigate the human suffering seen in every neighborhood, every block, and under every overpass.
Nowhere is this systemic failure clearer than in the state’s massive infrastructure and social safety net projects. During the COVID-19 pandemic, the California Employment Development Department oversaw what can only be described as a historic theft of public funds, with an estimated $20-$30 billion in fraudulent claims paid out. This was not a minor leak in the system; it was a complete systemic collapse where fraud rings exploited known vulnerabilities, and benefits were sent to prison inmates while legitimate claimants struggled to survive.
In any private-sector company, a $~30 billion loss would trigger immediate criminal investigations, the complete removal of leadership, bankruptcy, and jail time. In California, it simply vanished into the cloud of progressive governance.
Similarly, the California High-Speed Rail project stands as the Mount Rushmore of failure. Originally sold to voters as a $33 billion upgrade, the project has cost more than $100 billion, with no clear completion timeline, doesn’t even have ten feet of track laid, and will never connect the state’s major hubs. It has become a permanent funding mechanism for special interests grifters and shady contractors.
This pattern of rewarding failure extends to regional transit, where the Los Angeles County Metropolitan Transportation Authority has received over $70 billion in subsidies over the decades, only to see declining ridership and persistent safety concerns. In any rational system, failure triggers reform. In California’s one-party ecosystem, failure is used as justification for even more funding, creating a perverse incentive structure in which the worse a department performs, the more emergency resources it can demand from the legislature. The bigger the budget, the more power these unelected bureaucrats have.
As public conditions deteriorate, a dangerous shift is occurring in how the law is applied. There is a widening chasm between the laws on the books and those enforced, especially among liberal judges at all levels. Policies like expanded zero-bail frameworks (catch-and-release as if criminals were trout), reduced prosecution thresholds, and early parole of some of the worst offenders have created a system that many residents no longer view as predictable or neutral. Trust in equal enforcement is the bedrock of a functioning society, but that trust has eroded as Californians watch high-profile officials avoid consequences while ordinary residents face the full weight of enforcement for minor infractions.
The most unspeakable reality for the average, tax-paying Californian is the growing sense that the state’s massive resource extraction serves everyone except the people funding it. For the middle-class family or the small business owner, the California Contract has become a one-way street. They pay record-high taxes, yet they watch as billions are funneled into expansive programs providing EBT cards, subsidized housing, and comprehensive healthcare to non-taxpaying groups and favored demographics.
For someone working two jobs just to pay rent and gas, seeing the state provide a safety net to others that is more comprehensive than their own reality becomes a deep source of resentment. This feeling is worsened by a legal system many believe has abandoned victims in favor of offenders. Ordinary citizens get nothing in return from the state, while favored minorities and repeat offenders often get out of jail without even a slap on the wrist. How fair is that? When the state puts the comfort of lawbreakers above the safety of law-abiding citizens, the moral integrity of the government and civilization starts to deteriorate.
The math of this system is fundamentally unsustainable. By prioritizing the funding of services for non-contributors while simultaneously reducing the safety and quality of life for the tax base, the state is effectively incentivizing its most productive citizens to leave. This "voting with their feet" phenomenon is no longer anecdotal; it is a measurable fiscal and demographic emergency. California is losing hundreds of thousands of residents through net domestic outmigration, including a disproportionate share of high-income taxpayers and businesses relocating to lower-cost, more predictable states.
Recent data from the IRS and U.S. Census Bureau confirms that the net domestic migration loss exceeded 216,000 people in the latest fiscal year. Households earning between $100,000 and $250,000—the traditional backbone of the tax base—are moving in record numbers to Texas, Nevada, and Arizona. This "taxodus" resulted in an estimated $1.7 billion in lost personal income tax revenue in just one year, a figure that has continued to grow as the trend accelerated into 2026.
For the working class and small business owners who are still here, the high cost of living isn't a natural disaster; it's a policy decision. Regulations from the California Air Resources Board drive up fuel and electricity prices and business compliance costs. While average hourly wages in California have increased by 25% since 2020, monthly payments on mid-tier homes have jumped 74%, and rents have climbed 42%.
The state has become a place where you work harder for a life that’s increasingly unstable. The biggest injustice is that as domestic taxpayers leave, the state’s population is increasingly sustained by international migration and natural increase, creating a situation in which those who built and funded the state are replaced by those who benefit immediately from the very safety-net programs the departing middle class can no longer afford. It’s a demographic shift that helps the ruling party stay in power while weakening the state’s economic engine.
The state is now entering a dangerous feedback loop in which revenue volatility leads to massive deficit swings, prompting calls for even higher taxes and driving even more departures. California is simultaneously facing hundreds of billions in unfunded liabilities from systems like CalPERS, meaning that future tax revenue is already legally committed to past promises.
This ensures that services for current residents will be squeezed, and the tax burden will shift forward indefinitely onto the backs of those who cannot afford to leave. The political class, meanwhile, has quietly insulated itself, expanding taxpayer-funded security details to buffer themselves from the very public conditions their policies have fostered. They live behind gates and glass, protected by the very enforcement they deny to the shopkeeper or the parent walking their child to school.
History teaches us that such imbalances are not merely local anomalies; they are the precursors to civilizational breaking points. We have seen this script play out before. In the late Roman Empire, as the central government faced mounting deficits and military pressures, it resorted to aggressive currency debasement and crushing tax levies on the middle-class "curiales", the local landowners and merchants. As the state demanded more in taxes while failing to provide basic security against Germanic incursions, the curiales simply stopped producing or fled to the countryside, seeking protection from local warlords rather than the central state. The social contract didn't just break; it dissolved because the state became a parasite rather than a protector.
The breaking point occurred when the productive class realized they were being taxed to support a lifestyle and political system that provided neither representation nor relief.
Even in recent history, the fall of the Soviet Union offers a clear warning about the dangers of government excess and one-party control. The Soviet system collapsed when the "nomenklatura"—the political elite—became completely disconnected from the economic realities of the common people. While billions were spent on vanity projects and military growth, basic infrastructure fell apart, and the currency lost all value. The government maintained its power through a complicated network of patronage and favors for party loyalists, but once the central treasury ran out of money and the public saw that the state couldn't even provide basic services, the entire system's legitimacy evaporated overnight.
The uncomfortable truth is that the California system isn't "breaking"—it is working exactly as it was built to work. It is a closed loop with no internal correction mechanism. Money flows in, outcomes fail to improve, oversight remains nonexistent, and funding increases regardless of the results.
Systems like this do not self-correct through traditional voting in a one-party state (like the Soviet Union, Venezuela, or California), where electoral maps and machine politics maintain a permanent hold on power; they only change when driven by external shocks such as total fiscal collapse or the final flight of the tax base. Until it becomes impossible to maintain, the state's course remains fixed.
California will keep charging more and delivering less, betting that its residents will continue paying simply because they have nowhere else to go, and we have the best weather. For those who have examined the numbers, the question is no longer how to fix the system but why they should stay and be the last ones left to fund a government that treats them like an ATM rather than citizens.
In the end, California has been sold off to pay for a bureaucracy that only thinks of its own survival. The ordinary citizen, the person who follows the rules, pays their taxes, and tries to build a life, is the one being punished by a system that rewards the dependent and the delinquent.
This is the new California Contract: you give everything, you get nothing back.
(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.)
