If You Tax It, They Will Come?
California’s second gold rush is just around a billionaire-tax corner. This undoubtedly must be the thinking underlying the proposed billionaire wealth tax currently seeking to make the state’s November ballot. After all, if you didn’t expect there to be people to tax, why would you be pushing to tax them more? (RELATED: What’s Behind the Wild New Wealth Tax Proposals?)
For many years, California has acted on the principle that taxes are a good thing and that more of a good thing is even better. This is why the state has some of America’s highest tax rates: 13.3 percent on income, 70.9 cents per gallon of gas, and 7.25 percent on sales. Not called “The Golden State” for nothing, California’s been a goldmine for its Democrat-dominated government: “Eureka,” indeed.
Amazingly, the “tax more so you can spend more” math has not worked so well for California. In its 2026-2027 fiscal year, the state government is projected to run an $18 billion deficit, and that deficit is projected to roughly double to $35 billion in the next fiscal year. Deficits are nothing new to California: this year’s deficit will mark the fourth year in a row of deficits — $27 billion in 2023-24, $55 billion in 2024-25, $15 billion in 2025-2026 — despite seeing growth in revenues from the state’s sky-high taxes.
So, what is the Left’s solution for addressing spending consistently outpacing growing revenues? Why, raise taxes even more, of course. Only, this time, California’s Left is not looking at just run-of-the-mill tax hikes.
How a “one-time” 5 percent wealth tax can fill a recurring overspending problem is anyone’s guess — the best hunch being that this will be anything but a “one-time” affair.
California is currently considering operating on its “high taxes are good” mindset in a much, much bigger way. The far-left SEIU-UHW labor union is now trying to obtain the 875,000 signatures needed to get on November’s ballot a proposal to impose a 5 percent wealth tax on those with a net worth of $1 billion or more. As currently written, this would not be a conventional tax on income but a one-time tax on wealth, including assets like stocks, businesses, art and collectibles, and intellectual property — many assets with unrealized capital gains (i.e., gains only existing on paper and not in fact). And that 5 percent could be higher still if “voting shares” of stock (stock not really owned by an individual) are included in the net worth calculation.
How a “one-time” 5 percent wealth tax can fill a recurring overspending problem is anyone’s guess — the best hunch being that this will be anything but a “one-time” affair. Yet despite the dubiousness of its logic, and months before the billionaire tax could potentially be voted on, a recent poll shows it with 48 percent support.
Not even on the ballot, let alone passed by voters, it’s already having an effect: Billionaires like Mark Zuckerberg of Meta and Sergey Brin of Google have left. They are because the billionaire wealth tax proposal sets its effective date retroactive to January 1, 2026: If you were there then, you pay later.
Against these actual departures, billionaire tax supporters can take comfort in Sen. Bernie Sanders’s hectoring. At a recent Los Angeles rally, Sanders read aloud the billionaires’ names who had already fled the state, along with their now-unreachable assets, and scolded: “These billionaires are going to learn that we are still living in a democratic society where the people have some power.” Apparently, these departing billionaires have already learned that.
Supporters of California’s proposed billionaire tax can perhaps imagine that the billionaires who have already fled the state can be replaced by the ultra-wealthy who regularly sign the “tax me” letters that garner so much fawning attention in the establishment press. Simultaneous with this year’s World Economic Forum, Time to Win released an open letter signed by almost 400 billionaires and millionaires with the simple message: “So tax us. Tax the super rich.” This year’s number of signers is up significantly from the 260 who signed a similar letter just two years ago; at that time, Oxfam released a poll showing that “nearly three-quarters of millionaires polled in G20 countries support higher taxes on wealth.”
Lefty leaders also say taxes are good. New York City’s Mayor Mamdani repeatedly called for a wealth tax during his recent campaign and now promises a 9.5 percent property tax increase if he doesn’t get it. Lefty darling Rep. Alexandria Ocasio-Cortez called for a wealth tax at the recent Munich Security Conference. Ditto, Senator Elizabeth Warren and more.
So, the Left should certainly be expected to flock into California and offset the flood of wealthy leaving — as well as the 170,000 residents who have left since 2020. Never mind that California already has a surfeit of lefties and that people with ideas on how to spend money are not good replacements for people who know how to make money. (RELATED: Go South, Young Man, Go South)
Despite California’s population loss and the departure of billionaires ahead of a potential billionaire tax, the Left’s implacable insistence (if you raise taxes, you will get more revenues) drowns out economics (you get less of what you tax) — following a “laugher curve” instead of the Laffer curve. The billionaire tax’s supporters are whispering in California’s ear: “If you tax it, they will come.” And Californians are listening.
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J.T. Young is the author of the recent book, Unprecedented Assault: How Big Government Unleashed America’s Socialist Left from RealClear Publishing. Follow him on Substack.