The 20th Theorem of Government and the Consequences of Fiscal Foolishness in the State of Washington

April 10, 2025 by Dan Mitchell @ International Liberty

I often cite the 20th Theorem of Government (France, Brazil, Colombia, Maryland) to emphasize the danger of spending profligacy.

Today, let’s add the state of Washington to that list.

We’ll start with a chart from Americans for Tax Reform showing that the burden of state spending has expanded faster than population plus inflation.

As one might suspect, bad spending policy leads to bad tax policy. I’ve already written, both in 2010 and 2015, about politicians in the state doing everything they can to impose an income tax.

Sadly, they have been able to get through a capital gains tax, thanks in part to Justices on the state’s supreme court deciding to put ideology above the Washington constitution. Emboldened by that move, state politicians now want a form of wealth tax.

But the mere threat of such a discriminatory levy is already having a negative impact. In an article for Bloomberg, Anna Edgerton writes about how politicians in the state of Washington are driving away the geese who lay the golden eggs.

At a Christmas party last year in Las Vegas, nearly a dozen wealthy former residents of Washington state compared notes on their transition to the desert. …Las Vegas realtor Ryan Tsui has been watching the exodus unfold. The Evergreen State ex-pats he’s helped move to his city are almost exclusively wealthy, he said, with many looking for houses worth $8 million or more. …

“Some of these high net worth people are liquidating a career of stock options from the nineties to now,” said Tsui. “That starts to add up.”

 Such portfolios are now a target in Washington. Senate Democrats included a 1% tax on the stocks, bonds, exchange-traded funds and mutual funds… Washington’s wealthy had already been watching their tax burdens rise.

 

The state’s 7% tax on capital gains over $270,000, which survived legal challenges and a repeal effort, has only been collected since 2023. …Nevada, which has no capital-gains tax and no estate tax, isn’t the only place Washingtonians are looking. There is Arizona, where income and capital gains are taxed at 2.5% and there is no estate tax. Florida and Texas are also attractive… 

Investment magnate Ken Fisher blamed a state supreme court decision upholding Washington’s capital-gains tax for his move to Texas in 2023. Amazon founder Jeff Bezos didn’t cite taxes as factor in his move from Seattle to Miami in 2023, though he likely saved $288 million when he sold $4 billion in Amazon stock less than four months after he relocated. …The northwest corner of the US hasn’t seen the same population outflows as fellow blue states like California, New York and New Jersey. Washington, while politically liberal, has comparatively low taxes.

Now the budget debate in Olympia, the state capital, is raising questions about the unintended consequences of vowing to soak the rich. …Washington’s loss is increasingly looking like Nevada’s gain.

Jeff Saling, head of StartUpNV, said he was driving when someone told him about Washington’s then-new capital gains tax. …

“As somebody who’s working on economic development, to see somebody shoot themselves in the foot like that, it makes me cry a little bit,” Saling said. “But at the same time, it’s a hell of an opportunity for us.”

Needless to say, I applaud when successful taxpayers escape greedy politicians.  Indeed, I hope so many entrepreneurs and investors leave the Evergreen State that Washington winds up with a fiscal crisis.

Maybe, just maybe, the politicians in Olympia would then learn that there are consequences to economic illiteracy. Though I confess politicians in Illinois and California haven’t learned, and they’ve caused even greater levels of damage.

P.S. If you want to know one of the reasons why the state is in trouble, Washington had one of the nation’s worst governors between 2013 and 2025. In some years, he was the worst governor.

As the Capitol Restrooms Turn—in Three Acts

By Robin Itzler

Editor's Note:  This is one of the commentaries selected from Robin's weekly newsletter Patriot Neighbors. Any cartoons appearing will have been added by me.  If you wish to get the full edition, E-mail her at PatriotNeighbors@yahoo.com to get on her list, it's free. RK

Act I Rep.  Nancy Mace: 

Keep men out of women’s restrooms South Carolina Representative Nancy Mace, who is a rape survivor, announced plans to introduce a bill that would bar members and employees from using restrooms on federal property, and specifically in the Capitol and House buildings, based on their identity. They would have to use restrooms based on their biological birth. And yes, this started because Delaware representative-elect Tim/Sarah McBride will be in Congress. Mace didn’t want to find a biological male in the restroom or locker room and doesn’t think other women should have to walk in and see a man in a woman’s restroom or locker room. 

To share your thoughts with Rep. Mace: Email Only for Constituents, Phone: 202-225-3176, Write: 1728 Longworth House Office Bldg., Washington, DC 20515 

Act II Rep. Marjorie Taylor Green:

Have Dem & Rep Restrooms Georgia Rep. Green had a different idea that she shared on X: “Instead of making a trans bathroom, we should make a Republican women’s bathroom and a Democrat women’s bathroom, so all the Democrat women who agree with men using the women’s bathroom can share the bathroom with the mentally ill trans biological men that they support. But NO biological men, no matter what level of dress up they play, are allowed in the Republican women’s bathroom.” 

To share your thoughts with Rep. Green: Email Only for constituents,  Phone: 202-225-5211 Write: 403 Cannon Building, Washington, DC 20515 

Act III House Speaker Johnson:

Made a ruling On November 19, House Speaker Mike Johnson said he didn’t want to get involved in the Capitol restroom debate. The next day, he changed course and issued a short statement: 

“All single-sex facilities in the Capitol and House Office Buildings — such as restrooms, changing rooms, and locker rooms — are reserved for individuals of that biological sex. It is important to note that each Member office has its own private restroom, and unisex restrooms are available throughout the Capitol. Women deserve women’s only spaces.” 

To share your thoughts with House Speaker Johnson: Email Only for constituents, Phone: 202-225-2777, Write: 568 Cannon House Office Building, Washington, DC 20515

Florida’s One-Man Laffer Curve

February 14, 2024 by Dan Mitchell @ International Liberty

Inflation is having an effect on everything, even policy analysis.

Back in 2013, I wrote that Phil Mickelson was “California’s One-Man Laffer Curve” because he wanted to escape the Golden State to save about $1.2 million per year in taxes.

 

But now, when a goose that lays golden eggs wants to escape, the numbers are much bigger.

How much bigger?

According to this story by CNBC, Jeff Bezos saved more than $600 million by moving from Seattle to Miami. That’s the steroid-fueled version of a one-man Laffer Curve.

Here are some excerpts from the report, which was authored by Robert Frank.

Jeff Bezos’ $2 billion stock sale last week came with an added perk: no state taxes. Last year, Bezos announced on Instagram that he was leaving Seattle after nearly 30 years to move to Miami. He said the move was to be closer to his parents and his rocket launches at Blue Origin. The timing also suggested another reason: taxes.

In 2022 Washington state imposed a new, 7% capital gains tax on sales of stocks or bonds of more than $250,000. Washington state doesn’t have a personal income tax, so the new levy marked the first time Bezos would face state taxes on his stock sales. …In 2022, when the tax took effect, Bezos stopped selling. He didn’t sell any Amazon stock in 2022 or 2023…

After his move to Miami, Bezos made up for lost time. Last week, a filing with the SEC revealed that Bezos launched a pre-scheduled stock-selling plan to unload 50 million shares before Jan. 31, 2025. At today’s price, that would total more than $8.7 billion. Florida has no state income tax or a tax on capital gains. So on the $2 billion sale last week, he saved $140 million that he would have paid to Washington state.

On the entire sale of 50 million shares over the next year, he will save at least $610 million. …he’s more than paid for his 417-foot yacht, Koru, with just his Florida tax savings.

I have two reactions to this report, one analytical and one visceral.

• My analytical reaction is that this story is good news because it keeps money in the private sector where it will be used more productively and also because it sends a powerful signal to the proponents of a state suicide pact that it is foolish to overtax people who can easily move.
• My visceral reaction is to cheer that the greedy politicians in the state of Washington wound up with an exploding cigar rather then several hundred million dollars that they could use to buy votes. For what it’s worth, I expect more rich people follow in Bezos’ footsteps.

P.S. I wonder about the revenue implications of the state capital gains tax in Washington. Notwithstanding Bezos moving out, I’m sure there will be some revenue collected from this misguided levy. But that doesn’t mean the tax will be a net plus for politicians. You also need to consider that the exodus of successful taxpayers will lead to less revenue from sales taxes, property taxes, and other levies.

DC and California Going Broke Fast

What's the common denominator?

by Andrew Moran | Dec 15, 2023 @ Liberty Nation News

(Photo by Ty O'Neil/SOPA Images/LightRocket via Getty Images)

The fiscal year just started, and the US government is already running a massive budget deficit. In November, the federal shortfall was a larger-than-expected $314 billion, fueled by a 17% increase in spending. In only the first two months of FY 2024, the gap totals $381.5 billion, thanks to huge outlays for Social Security, Medicare, national defense, and interest payments. Washington’s river of red ink and IOUs stretches across the nation, including into one of the largest states in the country: California.

Budget Deficit in California

Gavin Newsom (Photo by Liu Guanguan/China News Service/VCG via Getty Images)

While California Gov. Gavin Newsom (D) proved to the nation during his debate with Florida Gov. Ron DeSantis (R) why his state is a mess, the latest figures confirm what many already know: The Golden State is being sucked into a fiscal black hole. The non-partisan Legislative Analyst’s Office (LAO) confirmed on Dec. 8 that the state’s budget deficit soared to an all-time high of $68 billion, driven by shrinking tax revenues. This topped the June estimate of a $14.3 billion shortfall.

State budget analysts warn that California will need to address the ballooning deficit. This could involve using its $30 billion cash reserves, employing one-time spending cuts, and adjusting how it funds education and other generous social programs. However, all of these options could be short-term solutions, as the LAO forecast that California could face annual budget deficits of $30 billion for the next few years.

The good news for Newsom is that California is not facing a crisis. LAO official Gabriel Petek told reporters: “The state remains in a good cash position, and that really wasn’t the case back at the start of the Great Recession. We don’t face the same kind of liquidity challenges that we had at that time, and so I would stop short of describing it as a crisis.” At the same time, massive budget deficits suggest that the state needs to be more cautious moving forward, says California Senate President Pro Tem Toni Atkins. She told Politico that “we’re going to have to slow down over time,” pertaining to existing and new spending. But will Gavination decelerate its expenditures? Unlikely.

Other States in the Red

The Golden State isn’t the only one facing an immense budget deficit. In fact, nine others are enduring long-term fiscal imbalances, including Connecticut, Illinois, Massachusetts, New Jersey, and New York. This has been driven by governors and legislative chambers overpromising, overspending, and underdelivering for years without any respite.

More could be joining the list soon, including Minnesota, which is forecast to see a shortfall of $2.31 billion in the 2026-27 fiscal years. Mark Koran, a GOP senator in North Branch, summarized the situation in a recent statement following the Office of Minnesota Management and Budget’s economic projection:

“In only one session, single-party Democrat control of government has taken us from a $19 billion surplus to a projected $2.31 billion deficit in the near future. Their record of reckless overspending, massive tax increases, broken tax relief pledges, and now looming deficits are simply not sustainable. At the same time, inflation continues to put pressure on family budgets every month. Minnesotans cannot afford Democrats’ irresponsible governing any longer.”

Sorry, Cheney, Deficits Do Matter

Former Vice President Dick Cheney famously said that “deficits don’t matter.” This Republican mantra was shared shortly before former President George W. Bush declared that the United States needed to sacrifice free-market principles to save the free market. Democrats might not be so blunt in their support of debt and deficits, but their actions, whether at the state or federal level, show that they also lack the ability to balance the books. Since arriving at the White House in 2021, President Joe Biden has overseen the national debt soaring by approximately $7 trillion while recording some of US history’s largest deficits. Many experts have warned of the growing consequences of fiscal irresponsibility, but with interest rates at their highest levels in more than two decades, budget deficits being the new normal might breed a fiscal crisis.

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Democrats Create a Transgender Child Kidnapping Network

By Daniel Greenfield May 21, 2023 @ Sultan Knish Blog 

“Trans Minors Protected from Parents Under Washington Law,” the Associated Press headlined its story. A short time later the story had officially been “withdrawn” by the AP.  Withdrawing the story however didn’t change the facts.

Washington Senate Bill 5599, titled, “Supporting youth and young adults seeking protected health care services”, allows shelters where a child runaway shows up not to notify his or her parents. While normally, unless a child were suffering “abuse or neglect”, the shelter would be obligated to inform the parents between 24 and 72 hours after arrival. The new law adds minors getting abortions and transgender treatments as “compelling reasons” not to notify their parents.

Once a child is listed as transgender, the parents are automatically treated as abusers.

Instead of contacting a child’s parents, the system will contact Washington’s child services department essentially claiming automatic state custody of any children classified as transgender. This measure follows on the heels of school policies where children are encouraged to imagine they’re another gender without telling their parents and shelter systems in the state that have refused to disclose information about minors to their families.

Laws like this not only violate family bonds for political reasons on the level of some of the worst totalitarian regimes in the world, they’re a bonanza to actual abusers who use social media to lure teenagers into running away. Senate Bill 5599 makes Washington a magnet for teenage runaways and sexual predators. That’s not surprising in a state where Seattle Mayor Ed Murray only resigned after being accused of sexually abusing five teenage boys.

Equal Rights Washington, one of the pressure groups behind the transgender child kidnapping bill, had been one of Murray’s biggest backers. After five men came forward to accuse the gay rights advocate of sexually assaulting them, Monisha Harrell, ERW’s chairwoman and a niece of the current Seattle mayor, expressed “sadness for the loss of a leader who has put himself on the front line of many of these causes that have been so important to us.”

There was no mention of any sadness for the young men her ally had assaulted, including Delvonn Heckard, a black man who had become addicted to drugs as a teenager when Murray was exploiting him, who was found dead a year after Murray’s resignation.

Even with five accusers, the ERW’s Monisha suggested that Muiray could win a write-in election because, “there might be people who will support him because they feel he was wronged, and that it will feel like righting a wrong.”

Equal Rights Washington and its transgender child kidnapping bill are not concerned with protecting children, just enabling their abusers, the way they did with Ed Murray.

The correct name for Senate Bill 5599 ought to be the Ed Murray Child Abduction Bill because that is the primary function that it serves. Washington State was not only the stalking ground for Ed Murray, it’s been the epicenter of some of the most aggressive child kidnapping measures.

Children can begin receiving “gender-affirming care” and admit themselves without parental consent in Washington beginning at the age of 13. Health insurance companies are not allowed to tell their parents about any medical procedures involving “gender affirming care”.

The same “shelter” program being empowered by the Ed Murray Child Abduction Bill already allows thirteen-year olds with stable loving families to check themselves into shelters.

And those parents who try to fight the mutilation of their children face serious consequences.

One parent, told that if he did not consent to transgender child mutilation would lose custody of his son to the state, took him and fled Washington. And he was far from the only one.

Through this bill and a previous one from last year, Washington’s social services system is effectively able to take custody and make medical decisions on behalf of a minor without parental consent. The system is able to bypass even the facade of custody hearings and accusations of abuse aimed at the parents for children that attract the political predators.

Gov. Inslee and Democrats have claimed that this is about dealing with a homeless crisis, but Washington Senate Bill 5599 specifically classifies Democrat policy priorities, abortion and transgender sexual mutilation, as the “protected health care services” they’re exempting.

Washington’s transgender child kidnapping bill follows in the footsteps of California’s Senate Bill 107. SB 107 was promoted by State Senator Scott Weiner, who had previously made national headlines for empowering judges to keep those guilty of “illegal sexual relations between a teenager age 15 and over and a partner within 10 years of age” off the sex offender registry.

None of this sexually abusive behavior is too surprising in a state that still venerates Harvey Milk: a California Democrat who supported Jim Jones and lured teenage runaways.

As the Alliance Defending Freedom argued, “SB 107 violates parental rights protected by the U.S. Constitution by giving California courts the ability to strip parents who reside in another state of their parental rights if their child travels to California to obtain gender transition procedures—including harmful puberty blockers, cross-sex hormones, and irreversible surgeries. It also denies parents the right to have access to their child’s medical information.”

Despite SB 107’s unconstitutional nature, 19 other Democrat states have introduced similar “transgender sanctuary bills”. Similar to sanctuary states for illegal aliens, child grooming and mutilation advocates hope to turn blue states into areas outside federal law. Much as sanctuary states for illegal aliens have led to a sizable death toll from crime, mass shootings and drunk driving, turning blue states into magnets for child grooming and sexual mutilation will cost lives.

While some trade conspiracy theories about underground networks, Democrats, backed by major donors, are putting into place a child kidnapping network encompassing half the country.

The network operates under the guise of “protecting” children from their parents. But that is how child groomers always operate. They claim that they understand teenagers when their parents don’t. They insinuate themselves into their confidence, win their trust and then manipulate them.

But what had been the practice of a handful of deviant men is now the government policy of entire states implemented by massive social services networks, clinicians and therapists.

As the rates of teenage depression and suicides increase, the Democrats are rushing to take advantage of troubled teens, manipulating them into joining its political cults and servicing its top political figures. Now that the politicians and bureaucrats are promising to protect children from their parents, who will protect the children, parents and families from the Democrats? 

 Daniel Greenfield is a Shillman Journalism Fellow at the David Horowitz Freedom Center. This article previously appeared at the Center's Front Page Magazine.  Click here to subscribe to my articles. And click here to support my work with a donation. Thank you for reading.