California is, politically speaking, a one-party state. Democrats have supermajorities in both the state house and senate, which means the only thing that can stop them is stubborn fiscal reality.
We saw this play out just a few months ago when California's plan to extend Medi-Cal (the state's version of Medicaid) to illegal immigrants blew a big hole in the budget, forcing Gov. Newsome to dial it back and borrow money.
But now, some progressive economists are teaming up with California unions for a fix that could plug the state's expected budget shortfall for the next four years. The proposal is a billionaire's wealth tax which would apply to as few as 180 people in the state.
The “2026 Billionaire Tax Act,” which was received by the California attorney general on Thursday, would use the one-time funds to plug holes in the state’s health care system caused by reductions in federal funding enabled by the “One Big Beautiful Bill” legislation passed over the summer. Some 10% of the funds would be used to support public K-12 education.
UC Berkeley economics professor Emmanuel Saez, law professor Brian Galle, and Stanford law professor Darien Shanske were involved in drafting the proposal, according to a spokesperson with the initiative’s campaign. Saez, who has advocated for a more progressive wealth tax for(opens in new tab) years(opens in new tab), said the initiative gives the state a chance to bolster revenue without hiking taxes for working- and middle-class Californians...
Saez believes that the initiative will easily make the ballot because of the organizing experience of the union and polling which shows a majority of voters are behind the idea.
“It has a very good shot at passing and becoming the first tax on the ultrarich in the world,” he told The Standard.
The progressive academics have teamed up with a health care union to push the measure onto the ballot. And because it impacts so few people, it's expected to be popular.
Two health care industry players — Jim Mangia, chief executive of St. John’s Community Health, and Suzanne Jimenez, chief of staff for Service Employees International Union-United Healthcare Workers West — on Thursday formally filed the 2026 Billionaire Tax Act, a proposed statewide ballot measure that would tax billionaires with a net worth of more than $1 billion...
Organizers say the tax would affect only about 200 Californians — the wealthiest 0.0005% of residents — while stabilizing hospitals, community clinics, long-term care facilities and K-12 schools threatened by the federal reductions.
Because this is a wealth tax, it's not targeting income like a normal tax, it's targeting 5% of everything the 180 or so California billionaires own. Of course the first step in assessing a tax is for everyone in the state to declare their total net worth to the state's tax collectors.
Under the plan, the Franchise Tax Board would require all California residents to declare their total net worth, including interests in private companies, real estate, art, and intellectual property. The tax could be paid in full or spread over five years with interest, with steep penalties for underreporting.
The state would then single out the billionaires and force them to sell 5% of their net worth in order to pay the state this tax. But fear not because California promises not to use that against you, only some of these people:
- Larry Page and Sergey Brin, co-founders of Google, with estimated net worths of about $130 billion and $125 billion, respectively.
- Mark Zuckerberg, CEO of Meta Platforms, worth roughly $115 billion.
- Larry Ellison, Oracle co-founder, with assets around $140 billion, though he now primarily resides in Hawaii.
- Eric Schmidt, former Google CEO, with an estimated $25 billion.
- Reed Hastings, Netflix co-founder, at about $6 billion.
- Patrick and John Collison, Stripe founders, each estimated near $10 billion.
The goal is to raise $100 billion all at once and then parcel that out at a maximum of $25 billion per year. So at most, this one time tax would fix the state's budget shortfall for four years.
What happens after that if California spending isn't under control? You can guess. You can also guess that if this goes through, other blue states will soon be following California's lead.
If this initiative qualifies, it would mark the first time that a state ballot measure imposes a temporary tax on billionaires’ total wealth. Proponents hope California’s model will inspire emergency funding mechanisms in other states.
So isn't it likely that this tax will simply cause billionaires to leave California? It seems obvious to me, but the proponents think most billionaires won't leave as they are already heavily invested in the state and won't want to pull up stakes. But is that really true?
Elon Musk already left, he clearly saw the writing on the wall and moved his HQ to Texas a few years ago. Other billionaires will surely follow. At a minimum, this tax will ensure that no billionaires will be moving to California anytime soon.
Opponents of the legislation argue that it will only push(opens in new tab) billionaires out of the state; although those who choose to leave to avoid paying the tax would have to do so before the start of 2026.
“Even if it’s a one-time tax, it would increase the chances of these people to relocate,” Enrico Moretti, another UC Berkeley economics professor, told Bloomberg. “It would also reduce the chances that these people bring their companies and their (employees) to California in the future.”
Living in California is like being caught in the later chapters of an Ayn Rand novel. We've now reached a stage where the state is simply planning to seize property from people, albeit only 5% and only once (they claim).
There's no way this is only going to happen once. Once the socialist camel's nose is under the tent, the rest will follow. Billionaires aren't dumb. They'll leave or never come here in the first place. Does the AI boom have to be happening in Silicon Valley? Maybe 30 years ago, but not anymore. Those people could work from almost anywhere now and they soon will be. Texas should be ramping up its ad campaign to lure them out of California as we speak.
Sooner or later, progressives will kill the golden goose in the golden state, but they won't admit it until it happens. And even when they drive all the billionaires out and the budget crisis gets worse, they'll keep blaming the billionaires not their own policies.
Editor’s Note: The Schumer Shutdown is here. Rather than put the American people first, Chuck Schumer and the radical Democrats forced a government shutdown for healthcare for illegals. They own this.
Help us continue to report the truth about the Schumer Shutdown. Use promo code POTUS47 to get 74% off your VIP membership.
Join the conversation as a VIP Member