Wealth Inequality and California’s Wealth Tax Proposal

2025 was a year in which the ten wealthiest did quite well for themselves as did the rest of their cohorts among both the wealthiest .1% and the wealthiest 1%.

According to the Bloomberg Billionaires Index, the combined wealth of the wealthiest ten in 2025 reached $2,484 billion after growing 29.3% during the year with $187 billion of the increase of $563 billion going to just one individual, the lovable Elon Musk, whose individual wealth reached $619 billion.

Based on the Federal Reserve Board figures, the holdings of the wealthiest .1%, who consists of approximately 342,000 people, saw their wealth expand in 2025 over 12.8% or by $2.9 trillion going from $22.57 trillion to $25.47 trillion. Additionally, their share of the nation’s wealth grew .5% to a new record high of 14.5% since the figures began being calculated in 1989.

In 2025, the size of the wealth of the wealthiest 1% increased from $49.97 trillion to $55.92 trillion with their share of the nation’s wealth going from 31% to 31.9% while the share of the poorest 90% declined from 32.6% to 31.7%.

The Biden Years

Trump has referred to Biden as “pathetic,” “sad,” “a disaster,” and “incompetent” who “didn’t know he was alive” who, as president, “did a terrible, terrible job.” However, Trump may look favorably upon what happened to the wealth of the wealthiest during Biden’s time in office.

For the wealthy, the time of Biden’s presidency was not “a disaster.” The wealthiest ten, based on the Bloomberg Billionaires Index saw their fortunes, in a mere four years, increase from $1.068 trillion at the beginning of 2021 to $1.968 trillion as of the end of 2024, by over 84%, during the “pathetic” and “incompetent” Biden administration.

According to the Federal Reserve Board, the size of the wealth of the wealthiest .1% from the end of 2020 to the last quarter of 2024 increased over 41%, in nominal dollars going from $15.99 trillion to $22.57 trillion, and their share of the nation’s wealth went from 13% to 14%.

Bigger Picture of Wealth Inequality

The increase in wealth inequality has been a trend for years. There are years in which the level of inequality has declined more than offset by the many more years in which it has increased. The U.S. Federal Reserve Board figures show that from the third quarter of 1989 until the end of 2025, the share of the country’s wealth held by the wealthiest .1% of the population increased over 60% from 8.6% to 14.5%. The share of the nation’s wealth held by the wealthiest 1% increased from 22.8% to 31.9%. During the same period, the share of wealth held by the poorest 90% of the population declined from 39.2% to 31.7% with the poorest 50% experiencing a decline from 3.5% to 2.5% though, since 1989, it has been as low as .4%.

In terms of nominal dollars, since 1989, according to the Fed, the wealth of the .1% increased from $1.76 trillion to $25.47 trillion while the wealth of the poorest 50% increased from $.72 trillion to $4.31 trillion. This meant that the wealth of the .1% went from being 2.44 times the wealth of the poorest 50% to being 4.9 times as great.

The difference in the size of the wealth of the poorest 50% compared to the wealthiest .1% went from $1.04 trillion in 1989 to $21.16 trillion at the end of 2025 for a twenty-fold increase.

California Wealth Tax Proposal

Despite the enormous growth in the size of their wealth, many billionaires are expressing their strong opposition to proposed wealth taxes that would reduce the size of their fortunes if the tax was greater than its growth.

Among the many wealth tax proposals, one that has received much attention is a one-time 5% wealth tax on California’s billionaires.

According to The California Legislature’s Nonpartisan Fiscal and Policy Advisor, if this union-backed wealth tax initiative reaches the ballot in California, voters [in November 2026] will have the opportunity to vote in favor of a one-time 5% tax on the wealth of billionaires with “90 percent of the money… spent on health care services for the public…[and] the rest….spent on administration of the wealth tax, education, and food assistance.”

As reported in Cal Matters, if passed, the billionaire tax measure would “plug an estimated $100 billion hole left by federal cuts to Medi-Cal and other social service programs.”

Noteworthy is that this measure would tax billionaires just once when, in a just world, it would be at a much higher level and permanent as a means to help bring us towards a world in which no individual is allowed to accumulate tens of billions of dollars in wealth.

Despite more than $50 million already spent in opposition to the wealth tax measure before it has even qualified for the ballot, polls indicate that a majority of California voters favor it.

Among the leading opponents of this California wealth tax measure is multi-centibillionaire Sergey Brin of Google.

To give his opposition some context: At the beginning of 2021, according to the Bloomberg Index, his wealth came to $79.8 billion rising to $250 billion as of the end of 2025, more than tripling. As of April 18, 2026, Bloomberg places it at $270 billion, up another $20 billion which is more than the proposed tax were the tax based on his wealth as of December 31, 2025.

Reducing the size of Brin’s ending 2025 wealth by 5% would have resulted in it being reduced to $237.5 billion. This amount is $157.7 billion more than where it stood at the beginning of 2021. In other words, the 5% tax on his wealth would result in it being $237,500 million. You read that correctly. The guy’s wealth would have declined from $250,000 million to $237,500 million.

At the end of 2025, if a basketball team had a giveaway promotion of a Brin bobblehead and each contained $1 million of his money, and it was given out to 20,000 fans, Brin would still have been in possession of wealth that comes to $230,000 million.

A society allowing that much wealth to be held by a single individual, especially given the level of homelessness, poverty, food insecurity, and inequality, to name just four social ills, and what many are calling an affordability crisis that afflicts many who work at fulltime jobs, could be viewed as insane.

Why do some people oppose this 5% wealth tax? As reported in Cal Matters,

“Critics question its feasibility and whether the state even knows how to accurately appraise a billionaire’s total wealth, a crucial step to evaluating how much tax they would owe. They fear long-term revenue loss by driving wealthy people out of California. And some resent that the union sponsoring the initiative, SEIU-United Healthcare Workers West, designed the measure to predominantly benefit its members rather than boost the state’s general fund, where it could go to all budget needs.”

Really? In high tech California, an accurate appraisal of the wealth of a couple of hundred billionaires poses a major difficulty, something already required when calculating one’s estate taxes? One could base the tax on the Bloomberg Billionaires Index and/or comparable sources unless a billionaire can prove their numbers are inaccurate.

What makes the position of opponents of the wealth tax troubling is a matter of basic unfairness. Much of the wealth of billionaires has never been subject to taxation since it comes in the form of an increase in the value of stock holdings that are currently not taxed unless the stock is sold. Furthermore, if the stock is sold at a gain and has been owned for more than a year, the federal rate of taxation on it is lower than the rate of taxation on the income earned from working at what could be a miserable, dangerous, and/or useless job.

A fear of a long-term revenue loss from billionaires fleeing the state is questionable.

One centi-billionaire, Nvidia’s Jensen Huang, has been quoted as saying he would accept paying the tax.

“I’ve got to tell you, I have not even thought about it once…We chose to live in Silicon Valley, and whatever taxes they would like to apply, so be it. I’m perfectly fine with it.”

One incentive he cites for staying in California is the presence of talented workers.

Shouldn’t those claiming a possible loss of revenue from billionaires fleeing California to states with lower or no income taxes be required to show how much California income tax billionaires currently pay, something that can be extremely low in comparison to the size of their fortunes?

If the tax is enacted, the public would greatly benefit from more resources going for health care, education and food assistance. The criticism of the Service Employees International Union (SEIU), sponsor of the initiative, comes across as a smear by making them appear as a narrowly focused greedy special interest group. Meanwhile, isn’t the club of billionaires opposed to the measure a real problematic greedy special interest group?

One key opponent of the 5% wealth tax initiative is California’s current governor, Gavin Newsom. He has been outspoken in his opposition. According to Political, Newsom claims the tax “makes no sense.” Does a system that allows for people to become billionaires and has enabled them to accumulate even more wealth make “sense” especially considering the large number of California residents who are homeless, impoverished, food insecure and lacking in proper health care?

Newsom, an “opposition party’s” potential presidential candidate, has, according to a PBS report,

“long opposed state-level wealth taxes, believing such levies would be disadvantageous for the world’s fourth-largest economy. At a time when California is strapped for cash and he is considering a 2028 presidential run, he is trying to block the proposal before it reaches the ballot.”

This raises a question. Is Newsom opposed to the wealth tax that is called a property tax (on real estate), or is he selective and only opposed to wealth taxes that are imposed on the fortunes of billionaires?

One of Newsom’s arguments against the tax is a fear that billionaires would flee the state causing harm to the state’s economy. However, is California better off catering to people such as Brin, Mark Zuckerberg and Larry Ellison? And the tax is based on one’s residence as of January 1, 2026. Unless they can time travel into the past, their residence for the imposition of the tax has been established.

If this California proposal reaches the ballot and passes, the special interest group of billionaires will likely challenge its legality and even win a favorable court ruling that nullifies the tax despite a majority of voters supporting it. And our wealthy friends will be given the message from the courts that we are on your side. Were they to lose in the courts, in the general scheme of matters, the loss would be a minor setback.

Whether the billionaires win or lose, one can hope that this California initiative effort helps to inspire people to be part of a mass movement that gains the power to reverse the continuation of obscene economic inequality.

For more detailed information about California’s wealth tax, read this article.

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