{"id":409602,"date":"2026-07-23T16:39:11","date_gmt":"2026-07-23T16:39:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ca\/409602\/"},"modified":"2026-07-23T16:39:11","modified_gmt":"2026-07-23T16:39:11","slug":"californias-billionaire-tax-should-be-just-the-starting-point","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ca\/409602\/","title":{"rendered":"California\u2019s Billionaire Tax Should Be Just the Starting Point"},"content":{"rendered":"

California\u2019s ultrarich clearly hate<\/a> the idea of a one-time, 5% tax on their wealth as part of the state\u2019s attempt to backfill the sudden loss of billions of dollars in federal funding for safety net programs like Medi-Cal.<\/p>\n

How might they feel about a 2% tax that lasts forever?<\/p>\n

Gabriel Zucman, a UC Berkeley economist known as a global expert in wealth inequality and tax avoidance, believes it can be done \u2014 and as goes California, so may go much of the world, he said.<\/p>\n

\u201cCalifornia could absolutely implement an annual wealth tax,\u201d said Zucman, who\u2019s also a professor at the Paris School of Economics in his native France. \u201cThis one-time tax is just the starting point of what could be.\u201d<\/p>\n

A permanent wealth tax, like the one he is proposing, isn\u2019t on the ballot in November, of course. Voters are presented only with Proposition 40<\/a>, the California Billionaire Tax Act, which if passed would raise an estimated $100 billion over five years by placing the 5% tax strictly on the state\u2019s 200-plus billionaires.<\/p>\n

The money would be heavily directed toward health care and food assistance programs, two targets of the Trump administration when it comes to federal funding cuts. Supporters argue that the California Billionaire Tax Act is both critically needed and aimed at those who can easily afford it, while the billionaires themselves, led by Google co-founder Sergey Brin, are spending massively<\/a> to defeat the measure.<\/p>\n

But a permanent tax is a fix that could have tremendous effect, Zucman said. And even in the early going, it could be worth $25 billion a year \u2014 every year \u2014 in additional revenue for the state.<\/p>\n

* * *<\/p>\n

Zucman\u2019s perspective is clear. He\u2019s the author of a new book<\/a>, We Need to Tax Billionaires, in which he argues for a 2% tax on the wealth of the richest people on Earth and lays out ways to accomplish that. His previous book, The Hidden Wealth of Nations, is widely credited with exposing countries for setting up international tax havens for the rich, and it has been translated into 18 languages.<\/p>\n

But his perspective, he said, is rooted in history. While the concept of an income tax is roughly a century old, it has never really touched the world\u2019s wealthiest, no matter where they live.<\/p>\n

\u201cBy and large, the income tax system works well \u2014 except for the super rich,\u201d Zucman said. \u201cThey find ways [through legal tax avoidance measures] to report either very little or no income. But a tax on wealth is much harder to manipulate than a tax on income.\u201d<\/p>\n

California\u2019s billionaire class is an example. Silicon Valley titans and other entrepreneurs take almost none of their money in income, diverting it instead into stock holdings that aren\u2019t taxed until they\u2019re cashed out. They can then borrow against the value of those holdings, also tax free.<\/p>\n

Partly as a result, their wealth grows and grows, spiraling far out of proportion to the economic health of the state as a whole. In a commentary<\/a> written earlier this year for The New York Times, Zucman and fellow UC Berkeley economist Emmanuel Saez noted that over the past three years alone, the fortunes of the Golden State\u2019s billionaires, fueled by explosive growth in AI and cryptocurrency technology, increased by 144% to more than $2 trillion \u2014 most of it shielded from California income tax.<\/p>\n

Prop. 40 gets at that money by taxing assets, not just income. A permanent 2% wealth tax would do the same, Zucman said \u2014 and California could make it happen, in part precisely because the state is home to so many ultrarich people.<\/p>\n

Anytime a proposition like this is suggested, the rich begin making threats. In the case of the California Billionaire Tax Act, Brin established residency in Nevada at the end of 2025, so as to avoid the tax that (if approved) will apply retroactively to anyone in the state as of Jan. 1, 2026. Plenty has been written about how many other megawealthy will follow.<\/p>\n

\u201cThey threaten. They agitate,\u201d said Zucman. But history suggests<\/a> that the actual outmigration of wealthy people from an area in response to a tax is low \u2014 most recently in Massachusetts, which has seen a huge net benefit<\/a> from an enhanced tax on millionaires, and New York City, where threats by the rich to leave in the wake of proposed taxes by Mayor Zohran Mamdani have not materialized.<\/p>\n

A 2% tax on the current valuation of billionaires\u2019 $2 trillion holdings in California would come to $40 billion per year. In their formula, Zucman and Saez set the actual projected figure far lower than that to account for the fact that some ultrarich would leave the state, while others would see their total wealth pools decrease slightly over time.<\/p>\n

\u201cThat leaves California with an additional $25 billion per year,\u201d Zucman said. \u201cEven if you factor in the fact that some billionaires will move, the state would still be vastly better off with a 2% annual wealth tax.\u201d<\/p>\n

* * *<\/p>\n

Could a permanent wealth tax really occur in California? The fate of Prop. 40 may shine some light on the question.<\/p>\n

Google\u2019s Brin has already poured $82 million<\/a> into one political action committee, Building a Better California, that is pushing two ballot measures, either of which would effectively gut the Billionaire Tax Act. The state would face heavy pushback from the billionaire class, and especially the tech sector, if California legislators went for a 2% permanent measure.<\/p>\n

The heavy tech spending against the measure is an example of why taxing the ultrawealthy feels necessary, Zucman said.<\/p>\n

\u201cFor most people, accumulating wealth is a good thing \u2014 it\u2019s safety for your older [years], or in case you lose a job,\u201d the professor said. \u201cBut the super rich don\u2019t accumulate billions for retirement. For them, wealth is power, the power to influence policymaking, buy elections, buy media companies \u2014 as we\u2019ve seen in the U.S. in recent years \u2014 and influence the prevailing technology. The concentration of wealth erodes democracy.\u201d<\/p>\n

Outgoing Gov. Gavin Newsom has opposed Prop. 40 since its inception, and tried to defuse it by offering other concessions to SEIU-United Healthcare Workers West, which is pushing the billionaire tax. (Disclosure: The union is a financial supporter of Capital & Main.) Those negotiations failed.<\/p>\n

At the same time, Newsom, a likely presidential candidate in 2028, supports a national wealth tax<\/a> on anyone worth more than $100 million. That\u2019s actually in line with Zucman\u2019s global proposal for a 2% tax on the wealth of anyone worth more than 100 million euros, or about $114 million.<\/p>\n

The whole idea of what constitutes a fair tax on the ultrawealthy would\u2019ve looked different just a few decades ago. In 1982, the first year of the Forbes 400<\/a> ranking of America\u2019s 400 richest people, their combined wealth was equivalent to about 2% of the country\u2019s gross domestic product<\/a>, according to Zucman.\u00a0<\/p>\n

This year, economists say, that figure is closer to 20% of GDP. It is a dramatic runup in the concentration of wealth into a few hands \u2014 and in California, it could be a ticket to new and ongoing sources of revenue.<\/p>\n

\u201cThe whole world is watching what is happening in California,\u201d Zucman said. \u201cIf the billionaire tax passes in November, it\u2019s going to have a ripple effect not only in the U.S., but globally.\u201d<\/p>\n

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