California's wealth tax should not pass
California’s tax code is riddled with inefficiencies, loopholes, and distortions that prevent the wealthy from contributing as they would under an optimized system. The real question is how to achieve that goal without wrecking the economy. The answer lies in broadening the tax base while lowering tax rates, not in retroactive confiscation.
TL;DR
- A ballot initiative in California proposes a one-time 5% tax on the worldwide wealth of billionaires.
- The tax would apply to billionaires residing in the state as of Jan. 1, 2026.
- Proceeds are intended to subsidize health insurance and food stamps for the poor.
- The measure is estimated to raise roughly $100 billion from an estimated $2 trillion in billionaire wealth.
- Opponents view the proposal as misguided, angry, punitive, and economically destructive.
- Critics believe it will accelerate out-migration of people and capital, stifle investment, and harm the intended beneficiaries.