Last month, a pack of progressive academics unveiled their latest social-engineering scheme: a ballot initiative to slap California’s billionaires with a brand-new wealth tax. Not an income tax — that would be too normal. No, this is a “one-time” confiscation of 5% of everything California’s billionaires own as of January 1, 2026.
It’s the kind of proposal only the academic left could dream up: punish the wealth creators, pretend it’s a moral crusade, and hope no one notices that the state is already hemorrhaging high-income earners because of exactly this kind of ideological nonsense.
Supporters claim this scheme would squeeze $100 billion out of roughly 180 people — the tiniest fraction of California’s population — and then dribble it out at $25 billion a year to patch the giant budget crater the state dug for itself. And why does California find itself in such catastrophic financial shape? Simple: the state keeps throwing billions at illegal immigrants while pretending the money grows on trees.
Case in point: extending Medicaid to illegal immigrants turned out to cost twice what lawmakers promised. Shockingly — to no one — California had to borrow billions just to keep the program afloat before finally slamming it on pause. Fiscal prudence, Democrat-style.
Even the Washington Post — hardly a bastion of conservative economics — blasted the wealth-tax plan as “the greatest act of economic self-sabotage in recent history.”
When the Post is lecturing California progressives about reality, you know things have gone off the rails. The editorial even praises Gov. Newsom for resisting the proposal — which tells you how extreme this plan truly is:
California Gov. Gavin Newsom has been trying to position himself as the leader of a listless Democratic Party ahead of his likely presidential run. He’s had some success energizing the base, but will the ambitious governor survive standing up to what could be his state’s greatest act of economic self-sabotage in recent history?…
Set aside the legal challenges that would inevitably follow and could prevent the tax from ever being levied. The most likely result is that billionaires would flee, so the state would also lose non-wealth-tax revenue. The risk of the measure passing might even cause some billionaires to leave, just in case. This initiative seems almost tailor-made to drive most Silicon Valley tech companies to Austin, Texas.
No doubt, Newsom understands the state probably wouldn’t recover from such an event, which is why he opposes the measure. His allies have already launched a political action committee to fight it…
More interesting than his electoral calculation, however, is what policy and moral arguments he uses against the tax. His approach, and how voters respond, will speak volumes about the state of Democratic Party as it seeks its way out of the political wilderness.
And how exactly is Newsom planning to “push back” on this insanity? Is he suddenly going to discover the concept of fairness — and point out that a tax targeting less than one-thousandth of the population is fundamentally unjust? Don’t count on it.
Ironically, Forbes tried to defend the tax using that very argument — claiming it’s fine to single out a microscopic group of Californians because, hey, they’re rich and there aren’t many of them:
California has nearly 40 million residents. The proposal suggests that a tax on just 200 of these people could address two significant concerns. Put differently, a tax on just 0.00005% of the population would address a significant set of problems facing all of California.
Regarding the second point, California billionaires tend to own superfluous assets. For instance, Zuckerberg owns 11 homes in Palo Alto, California, according to the New York Times. Many would argue that if he had to sell one or two of his homes, his life would not be materially impacted.
Whether you like Zuckerberg or not, the number of homes he owns isn’t the point; he invented, developed, and successfully marketed a product that a billion people want and love. That’s the epitome of the “American dream” right there.
Also, nobody seriously believes a wealth tax would leave billionaires wondering how to pay the electric bill. That’s not the point — and the left knows it. The real issue is what gets taxed. A billionaire’s wealth isn’t a stack of cash sitting in a vault; it’s ownership in companies like Tesla, Amazon, or Netflix.
So when the state slaps a “one-time” wealth tax on them, it’s not asking them to give up the tenth vacation house or the third yacht. It’s demanding they surrender pieces of the companies they built — their voting shares, their equity, their control. That’s not taxation; it’s forced dilution. It’s the government inserting itself as a partial owner without investing a single dime or taking a single risk.
And once that precedent is set, no company — and no entrepreneur — is safe.
Will Newsom admit the obvious — that once California creates a wealth tax, it will never be a “one-time” thing? The moment the state plugs one budget hole, Sacramento will find ten more reasons to resurrect the tax. That’s how these schemes always work: temporary in theory, permanent in practice.
And whatever Newsom says to distance himself from this proposal is going to collide head-on with the far left’s obsession with wealth taxes, both in California and in other blue states desperate to copy the idea. The progressive base loves the concept of punishing high achievers — even if it means destroying the economic ecosystem that funds their own social programs.
As the Washington Post correctly pointed out, passing this tax is basically an open invitation for the most successful people in the state — the ones driving innovation, investment, and job creation — to simply leave. Why stay somewhere that treats success like a crime?
The most common issue raised by skeptics of wealth taxes is “capital flight”. As discussed in a Tax Notes article, “such a tax would signal to wealthy taxpayers that they should reside elsewhere.” This article goes on to discuss that high-income taxpayers pay the majority of state income taxes in California, and even if a small number of those individuals leave, it could lead to long-term tax collection consequences.
This concern has been underscored by numerous academic studies. Most recently, an NBER working paper co-authored by Jakobsen, Kleven, Kolsrud, Landais, and Munoz finds that 1 one percentage-point increase in the top wealth tax rate in Sweden and Denmark leads to an outward migration of wealthy taxpayers by two percent. Other work in the American Economic Review by Moretti and Wilson documents that variation in jurisdictional taxes significantly influences the location of talent, suggesting that higher tax burdens lead individuals to relocate.
Anecdotally, we can look no further than Jeff Bezos (founder of Amazon), who moved from Washington to Florida in 2023. Even though he has many non-tax reasons to make this move, the move just so happened to coincide with Washington proposing a 1% wealth tax on individuals with over $250 million in total assets. Different from California, Washington is already a very competitive state as it comes to overall tax liabilities. As high-income Californians face the highest level of state income tax liability, this proposed wealth tax could be the straw that breaks the camel’s back toward their relocation decision.
Newsom isn’t pushing back on this because he suddenly discovered a soft spot for billionaires. He’s doing it because he’s smart enough to realize the obvious: this scheme would be an economic catastrophe for California. If even a dozen billionaires pack up and leave — and they absolutely will — the state’s budget hole will get even deeper, not smaller.
Shame on Forbes – which used to be the industry bible of capitalism – for endorsing left-wing socialist theft of property: Wealth.
