California’s wealth tax is already failing
California Democrats have not even successfully passed their wealth tax ballot proposition, and they are already admitting it will fail to work as advertised. That is just one of the takeaways from a revealing social media exchange between wealth tax backer Rep. Ro Khanna (D-CA) and billionaire entrepreneur Mark Cuban.
TL;DR
- California Democrats' wealth tax proposition (Proposition 40) is already being criticized for its potential ineffectiveness.
- Mark Cuban argues the tax will cause founders to move their startups out of California, calling it 'idiot startup founders' to stay.
- Rep. Ro Khanna suggests a government loan system where founders pledge shares to pay the tax, which Cuban finds illogical and potentially leading to state ownership of stock.
- Studies indicate that states imposing estate taxes, similar to wealth taxes, see a significant percentage of billionaires leave.
- The legislative analyst estimates Proposition 40 will raise less money than claimed and could cost the state hundreds of millions annually due to wealthy residents leaving.
- The article warns that losing future tech companies could outweigh any temporary revenue generated by the tax.
- California's history of extending supposedly temporary tax increases is noted, making entrepreneurs wary of long-term wealth tax implications.