Progressive Cities Running Out of Other People’s Money
- Rex Ballard
- 20 minutes ago
- 3 min read
As Margaret Thatcher famously observed, “The problem with socialism is that you eventually run out of other people’s money.” In 2026, New York City and Seattle provide textbook examples. Decades of progressive policies—sky-high taxes, heavy regulations, and expansive social spending—have strained budgets, prompting more tax hikes on businesses and high earners. The result? Major employers, founders, and workers are fleeing to business-friendly states like Texas, Florida, and Tennessee, leaving behind hollowed-out downtowns, plunging tax revenues, and collateral economic damage.
New York City: Tax the Rich, Watch Them Leave
NYC faces chronic budget shortfalls (e.g., $5.4 billion gaps) under Mayor Zohran Mamdani’s progressive agenda. Officials responded with proposals for higher corporate taxes, pied-à-terre surcharges on luxury second homes (up to 6.5%), personal income tax hikes on millionaires (+2% over $1M in some plans), and business tax increases.
Key departures and downsizing:
Goldman Sachs: Expanding aggressively in Dallas (new ~800,000 sq ft campus for 5,000+ employees) while conducting targeted layoffs and offering relocations or exits for NYC managers under “Project Voyage.” The firm has filed WARN notices in NYC, including one for 343 employees at its global headquarters (200 West Street) affecting ~3.4% of the ~9,965 staff there, with cuts spanning months - cuts in NYC could exceed 2,500 by the time they are done.
Citigroup: Cutting thousands globally, with hundreds in NYC offices via multiple WARN notices.
Morgan Stanley, BlackRock, JPMorgan: Layoffs and headcount reductions in NYC; expansions in Texas.
Broader trend: Nearly 5,000 businesses lost in early 2025 alone; net population outflow of ~114,000 in 2025.
Financial and collateral impact: Private-sector job growth has plummeted. Office vacancies remain elevated in many buildings despite some resilience in prime space (Manhattan availability at around 14-15% in Q1 2026). Storefront vacancies persist, with empty retail corridors. Population and business flight erode income and property tax revenues, forcing reliance on remaining taxpayers amid service strains.
Seattle/Washington State: Record Taxes, Record Vacancies
Washington imposed its largest tax hikes in state history (~$9B+), including progressive capital gains tax increases (7% to 9.9% on gains over $1M), Business & Occupation (B&O) tax surcharges and rate hikes, Seattle-specific B&O changes, and high-earner taxes.
Key departures and downsizing:
Amazon: Thousands of corporate layoffs with major Seattle impacts; vacated over 1 million sq ft.
Starbucks: Hundreds of HQ layoffs; relocating jobs to Nashville.
Meta, Expedia, Microsoft, Expeditors: Hundreds to thousands of cuts.
Fisher Investments: Relocated HQ from Camas, WA, to Plano, Texas, citing the capital gains tax. Retained some WA operations but shifted growth.
Broader: ~40,000 downtown jobs lost; 24% of WA employers considering leaving.
Financial and collateral impact: Downtown Seattle office vacancy rates hit 34-37% (among the nation’s worst). Commercial property values fell, shifting tax burdens to residents. Tax revenue shortfalls (e.g., from high-earner flight) are another collateral impact. Ripple effects include closed stores and slower job growth.
The Golden Goose Has Flown
These cities’ leaders treated successful businesses and high earners as infinite ATMs. The predictable result: Founders like Ken Fisher vote with their feet, companies rebalance to low-tax Sun Belt hubs, and workers follow. Tax revenues suffer as the productive base shrinks, vacancies soar, and remaining residents shoulder higher burdens. The jobs leaving these cities are high-wage jobs, many held by top-percentile taxpayers. The ripple effect that these departures have on collateral business is devastating.
California’s progressive one-party legislature is passing laws left and right with the same effect—high taxes, wealth tax proposals, regulatory burdens, and expansive spending—while the state leads the nation in net domestic out-migration, with hundreds of thousands of residents and significant business capital fleeing annually.
Shasta County and similar Northern California communities, when compared to the Bay Area and Southern California, offer a stark contrast: lower taxes, pro-business environments, lower labor costs, and room to grow. As NYC, Seattle, and California demonstrate, you can’t tax your way to prosperity when the golden goose migrates to greener pastures. Policymakers elsewhere should take note before repeating the same mistakes.
For Shasta Unfiltered readers: These trends underscore why local vigilance on taxes, spending, and regulations matters for keeping jobs and opportunity in Northern California.
Sources
Avison Young NYC Office Market Report (Q1 2026): https://www.avisonyoung.us/web/new-york/office-market-report
Goldman Sachs WARN / Dallas expansion reports via Bloomberg/NY Post archives.
Washington tax policy and Fisher Investments relocation: Dallas Innovates, state legislative trackers.
Seattle vacancy data: CommercialCafe, GeekWire, Property Ledger.
California migration: PPIC, CA Dept. of Finance, Census Bureau.
Broader exodus graphics and context: Fox Business, CBN News.
