The Daily Signal - The Golden State’s Biggest Myth: Taxes Aren’t Revenue | Elaine Culotti

Episode Date: January 27, 2026

California doesn’t “generate revenue”—it drains it. Taxes aren’t income, businesses create income, and Sacramento chased them out, argues Elaine Culotti, Daily Signal California commentator, on her podcast today:  “The state itself does not create any revenue. The state builds nothing. The state earns nothing. The state is money out. It is capital outflow to pay for the state to survive. To pay for the infrastructure that it owes.” 👉For more videos like this, subscribe to The Daily Signal’s YouTube channel and enable notifications to be alerted the second a new video drops: https://www.youtube.com/dailysignal?sub_confirmation=1 00:00 Introduction and Overview 01:06 California's Revenue Problem Explained 04:16 Impact of Bureaucracy and Overregulation 06:56 Proposed Solutions and Government Actions 08:42 Conclusion and Final Thoughts Learn more about your ad choices. Visit megaphone.fm/adchoices

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Visit medcan.com slash moments to get started. I've been thinking a little bit about some of the narratives. I keep hearing on podcasts from people in the business industry and people that aren't in the business industry but are politically motivated or feel like they need to talk about what's happening financially in California. California has a massive revenue problem. People don't understand is that you cannot view taxes as revenue, period. Taxes come from revenue. You have to have capital markets working. You have to have small business, big business, employment, construction, infrastructure.

The state makes no money. It has no revenue stream, period. Its revenue stream is taxpayer dollars. It is the biggest revenue problem in all of the United States because we have run all of the industry and business out of the state. Hi, it's Elaine Collotti for the Daily Signal. I've been thinking a little bit about some of the narratives I keep hearing on podcasts from people in the business industry and people that aren't in the business industry but are politically motivated or feel like they need to talk about what's happening financially in California. And I want to try to change the trajectory of a narrative that we keep hearing. And that is that California does not have a revenue problem.

This is nonsense. California has a massive revenue problem. What people don't understand is that you cannot view taxes as revenue, period. Taxes come from revenue. You have to have capital markets working. You have to have small business, big business, employment, construction, infrastructure. You have to be investing in. California, whether that is through having a job or building a bridge or buying a bag at a store,

it doesn't matter what it is. That is where the capital is generated, which creates revenue. Now, that revenue that's created from working is where taxes come in. And taxes go to the state, and that is state money to pay bills in the state that the state wants to call revenue. But it's not. It's taxpayer dollars that are coming from people who have money prior to working, that they've acquired, that they get from a job that they have, whatever you want to call it, the money comes from the people that live in the state that are creating revenue. the state itself does not create any revenue. The state builds nothing. The state earns nothing.

The state is money out. It is capital outflow to pay for the state to survive, to pay for the infrastructure that it owes to the state, to pay for the pensions that it owes for the state. The state makes no money. It has no revenue. stream period. Its revenue stream is taxpayer dollars and taxpayer dollars are earned by working or buying something or building something or investing in something. Then there is a tax.

That is a transactional tax and that tax the state can use to keep the state going in a circle, a revenue circle. They do not create revenue. California has a massive revenue problem. problem. Massive, huge. It is the biggest revenue problem in all of the United States because we have run all of the industry and business out of the state. We have hogtied new business. We have hogtied small business. We have hogtied Elon Musk and space industry. We have hogtide oil industry. We have hogtide farming industry. We have done this through bureaucracy, overtaxing, measures that create such an encumbrance that you cannot actually build or open or occupy your business. We have hog-tied these businesses through legal litigation and overzealous attorneys collecting revenues for minor infractions versus major infractions. I could go on and on about how we have demolished the ability to mobilize.

in California and build real revenue models to pay taxes. And we have to stop saying that California does not have a revenue problem. It has a tremendous revenue problem. And on top of it, the government is so big that needs that revenue to stay big. They are seeking to get more of their revenue, which they call revenue, which is tax dollars, let's just call it what it is, from any source possible, including making up places to get tax like oligarchs tax or a billionaire's tax or mansion tax or any kind of tax that you can think of. This is what California is spending time doing Sacramento specifically. They've even created things like SB 7-9 and all of these things, which are basically

unfunded mandates on cities because they cannot figure out how to get business into the state to create real revenue capital revenue people working creating some sort of a business where money is actually flowing into the economy and they tax that you understand if you tax somebody that is not earning anything or building anything or making anything or having a business or going to work eventually they realize that there is no upside to being in California and they leave. And that's what's happening. California is not a retirement state, okay?

That's what we've created. This is a state of opportunity. But if the government stands between you and opportunity, you cannot create real revenue. And this has been a massive problem in California for a very long time, and we need to stop calling it revenue immediately. We need to squash it so that people can understand what's really happening here. I think if I hear it one more time, I don't know where to shout it from.

We have got to open California to business. We have got to handle things in Sacramento on the first day of the new administration that can be handled by the governor. And those are removing restrictions. Obviously, it's difficult to change law if you're the governor. It's very, very challenging. But removing crazy restrictions that stop people from being. able to rebuild, for example, the Palisades after the fires or Malibu or Altadine or any of that,

that is something the governor can do. Expanding departments that help move the needle. So, for example, how amazing would it be if Gavin Newsom on the very first day after the fires made Karen Bass and the city of Los Angeles expand the building department immediately to the Pacific Palisades? literally take over whatever was left there as a building, go to the landlord, pay rent, say, hey, you know what, we want to rent your building. We're going to cover your costs and we're going to open up a Pacific Palisades building department. And in this building

department, we are going to put every single person that is needed to say yes to getting this place cleaned up and rebuilt. But instead, we said we would do things to help but did not. I have all the video and all the receipts on that. And now, a year later, you have a town, that nothing has happened in because of red tape and nonsense. Yet you have an administration that says we don't have a revenue problem. Okay, what have we built in the last year? Let's do some inventory. What businesses have opened in the last year?

Let's do some inventory. What monumental infrastructure projects have not come to a screeching halt in the last year? The reason that none of these things are operating the way that they should, the reason we live in an upside-down world, is because of bureaucracy and backwards thinking in Sacramento, thinking that tax revenue is their revenue to spend and that we don't have to work for the tax revenue. It's so weird.

It's so weird. Oh, wait. It's going on. This is Elaine Collotti reporting for the Daily Signal.