It could lead to the financial ruin of California, the obliteration of Silicon Valley, and possibly even the end of capitalism as we know it. At least, that’s what you might reasonably conclude from the histrionic responses to the California Billionaire Tax Act.
The proposed onetime 5 percent wealth tax has not yet qualified for the November state ballot, but already billionaires, their conservative allies, and even Governor Gavin Newsom — a Democrat who may need billionaires’ support in a potential 2028 presidential bid — are blowing rhetorical gaskets. You’d think that the main proponent of the measure, the state’s largest health care union, SEIU-UHW, was calling for heads, not levies.
If this sounds familiar to Massachusetts voters, that’s because similarly hyperbolic warnings were unsuccessfully employed to fight the state’s 2022 millionaires tax ballot question. Not only did a mass millionaire exodus not come to pass, two years later the state had about 35 percent more millionaire residents, according to a report last year by two research groups.
California has more billionaires — about 200 — than any other state, and they would collectively be on the hook for an estimated $100 billion. The proceeds would be used to backfill cuts of up to $30 billion a year in the state’s budget due to the GOP’s Big Beautiful Bill. You may remember that the bill also included gigantic tax breaks for corporations and billionaires.
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You don’t have to be a tax policy expert to sense that the deep concern over this potential ballot measure is about more than the ultrawealthy having to hand over some of their stash (a onetime amount that proponents say is less than what they earn in investment returns in the average year).
Dan Schnur, a professor in the political science department at the University of California, Berkeley, said that up until recently, voters didn’t have much appetite for hiking taxes on rich people because most aspired to become rich themselves. For example, in 2022, California voters rejected a measure to slightly increase taxes on people making more than $2 million to pay for, among other things, wildfire preparation and response (whoops!).
But that attitude has shifted as the fortunes of a few people grew to previously unimaginable levels while everyone else struggled with higher prices, stagnant wages, and job insecurity. The growing resentment was certainly not assuaged last year when two of the county’s richest guys, President Trump and Elon Musk, began gleefully blowing up government agencies, firing midlevel bureaucrats by the thousands, and cutting benefits to lower-income Americans.
“The growing difference between wage earners and investors has been happening for a long time,” Schnur said. “Trump and Musk might have lit the match, but this was pretty dry kindling already.”
Mariel Garza
And now we are at a point when Americans at all levels are feeling hopeless and frustrated by the economic situation. Singer/songwriter Billie Eilish may have expressed the current anti-wealth sentiment best: “If you’re a billionaire, why are you a billionaire?” she said in October at an awards gathering that included billionaire Mark Zuckerberg. “No hate, but yeah, give your money away, shorties.”
So you can see why American billionaires may be worried about opening the gates to a flood of tax-the-rich initiatives.
A recent poll of California voters commissioned by unnamed “high-net-worth individuals” found that 48 percent of 800 respondents said they would vote for the measure, a figure that dropped slightly once they heard counterarguments. Considering the typical margin of error in election polls and the distance from election day, that’s not a result I would brag about.
Meanwhile, supporters say their own data and experience indicate widespread support. “Our internal polling shows that this is popular across California. In every region of the state it’s popular,” Suzanne Jimenez, chief of staff for the SEIU-UHW, in an interview. She said that signature gatherers are reporting people clamoring to sign their petitions. That’s good news for the proponents; they need to gather 875,000 valid signatures by mid April to qualify for the ballot.
Mary Lynne Vellinga
Furthermore, Brian Galle, a tax law professor at Berkeley who helped craft the California measure, said there is strong support for wealth taxes nationally. (He should know. He just published a treatise on the subject: “How to Tax the Ultrarich.”) “At least going back to 2020 there are a string of national polls showing taxes on the ultrarich are wildly popular,” he said.
Not all California billionaires object to the proposed tax. Nvidia founder Jensen Huang said he was “perfectly fine” paying his possible tab of $8 billion. Tom Steyer, a former hedge fund manager and the only billionaire running for California governor in 2026, is on board, too, saying the superrich, including himself, aren’t paying their fair share to a society that helped them amass their riches.
They are among a small minority of their cohort who appear to recognize that hoarding the wealth of the nation will ultimately doom everyone, particularly as AI is poised to wipe out millions of jobs.
“In a scenario where [gross domestic product] growth is 10–20% a year and AI is rapidly taking over the economy, yet single individuals hold appreciable fractions of the GDP, innovation is not the thing to worry about,” another California billionaire, Dario Amodei, CEO of the AI company Anthropic, wrote in a recent open letter. “The thing to worry about is a level of wealth concentration that will break society.”
Gulp. Now, that is something worthy of an over-the-top response.
This column originally appeared in the Boston Globe, where I am a contributor to the Opinion section. It is reprinted with permission.
