{"id":421250,"date":"2026-08-02T00:29:08","date_gmt":"2026-08-02T00:29:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ca\/421250\/"},"modified":"2026-08-02T00:29:08","modified_gmt":"2026-08-02T00:29:08","slug":"opinion-billionaire-tax-risks-californias-long-term-growth-for-a-temporary-fix","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ca\/421250\/","title":{"rendered":"Opinion: Billionaire tax risks California’s long-term growth for a temporary fix"},"content":{"rendered":"

\"Apple<\/a>People attend the annual World Wide Developers Conference at Apple\u2019s headquarters in Cupertino on June 8, 2026. (File photo by Noah Berger\/Associated Press)<\/p>\n

This commentary\u00a0was originally published by CalMatters.\u00a0Sign up<\/a>\u00a0for their newsletters.<\/p>\n

California has always been a place that bets on the future. From semiconductors and personal computing to biotechnology, clean energy, quantum, fusion power and AI, our state is the place that turns groundbreaking ideas into industries that transform the world.<\/p>\n

\"Opinion<\/a><\/p>\n

That innovation does more than create successful companies. It produces good jobs, expands opportunity through an innovation ecosystem, and generates revenue California uses to support schools, healthcare and our social safety net.<\/p>\n

Proposition 40<\/a>, on the November ballot, would put that entire ecosystem at risk. It could ultimately hurt the\u00a0Californians it is intended to help<\/a>.<\/p>\n

The measure would impose a one-time tax of 5% on Californians with more than $1 billion in covered assets, to help fund healthcare and other essential services. Those needs are real, especially at a time when the cost of living is on the rise and\u00a0Medi-Cal faces new shortfalls<\/a>. California must protect the programs residents depend on, especially as federal funding remains uncertain.<\/p>\n

Prop. 40 is not the way to do it. Voters should say \u2018no\u2019 and instead back two other commonsense measures on that ballot, Propositions 41 and 42.<\/p>\n

The\u00a0nonpartisan Legislative Analyst\u2019s Office estimates<\/a>\u00a0that Prop. 40 would produce an uptick of tens of billions of dollars in near-term revenue. But this is a sugar high. The LAO also projects an ongoing decrease in state income-tax collections of hundreds of millions of dollars or more each year if taxpayers leave California.<\/p>\n

That is Prop. 40\u2019s fundamental flaw. It would risk dependable, recurring revenue for a temporary infusion of money. Once that money is spent, California could be left with a smaller tax base to support essential services year after year.<\/p>\n

This is not the way to spur business dynamism which supports innovation and job creation.<\/p>\n

The consequences could extend beyond tax revenues. Founders and CEOs help determine where companies grow, workers are hired and investments are made. California benefits when those leaders and their companies remain rooted and invested in the success of our state.<\/p>\n

California endures as the world\u2019s leading center of technological innovation because of its exceptional universities, skilled workforce, access to capital and a culture that rewards bold thinking. These advantages have helped California companies develop lifesaving medicines, cleaner energy and technologies that improve daily life.<\/p>\n

But this leadership is not guaranteed.\u00a0Other states and nations are investing heavily<\/a>\u00a0in their innovation economies. California should reinforce the reasons companies choose to build here, not put out a big sign that encourages entrepreneurs to leave our state.<\/p>\n

The problem is that Prop. 40 would, in practice, tax the estimated value of businesses and ideas before they are actually sold or make any money. This approach doesn\u2019t work for companies that spend years on research with no guarantee of success.<\/p>\n

For example, a biotech company might spend 10 years creating a new medicine, or a clean-energy startup might need years of funding before it ever turns a profit. Under this plan, founders could end up with a massive tax bill for value that only exists on paper, without having the actual cash to pay it.<\/p>\n

The larger concern is what California could lose if more companies are formed or expanded elsewhere: jobs, investment, technological progress and future tax revenue.<\/p>\n

To be sure, successful business leaders should contribute to the state that helped make their success possible. California already taxes wages, business income, dividends and capital gains. Those who benefit most should help support the institutions that make broad-based prosperity possible.<\/p>\n

That is why voters should reject Prop. 40 and support\u00a0Proposition 42<\/a>.<\/p>\n

Prop. 42 would establish a clear rule against new state taxes based simply on ownership of financial assets, business interests and intellectual property. It would also prevent certain new taxes from being applied retroactively.<\/p>\n

The measure would not prevent California from taxing income or realized gains. It would preserve a sensible distinction between taxing economic gains and taxing ownership itself, while giving founders and CEOs predictable rules before deciding where to grow a company and hire workers.<\/p>\n

Proposition 41<\/a>\u00a0also deserves support. Greater review, transparency and auditing of special taxes would help voters understand how proposed taxes would operate and\u00a0whether the programs they fund are delivering results<\/a>.<\/p>\n

California does not have to choose between technological leadership and strong public services. Our innovation economy helps make those services possible.<\/p>\n

Prop. 40 makes the wrong bet: temporary money today at the risk of losing companies, jobs and dependable revenue tomorrow. Props. 41 and 42 offer a more responsible path grounded in accountability, predictability and confidence in California\u2019s future.<\/p>\n

Ahmad Thomas is the CEO of the Silicon Valley Leadership Group<\/a>.<\/p>\n

CalMatters<\/a>\u00a0is a nonpartisan and nonprofit news organization bringing Californians stories that probe, explain and explore solutions to quality of life issues while holding our leaders accountable.\u00a0<\/p>\n

Want to submit a letter to the editor, guest column or\u00a0opinion\u00a0piece? Find our guidelines and submission form\u00a0here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"People attend the annual World Wide Developers Conference at Apple\u2019s headquarters in Cupertino on June 8, 2026. (File…\n","protected":false},"author":2,"featured_media":421251,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[168244,7,9,8,1902,3310,2280,1694],"class_list":["post-421250","post","type-post","status-publish","format-standard","has-post-thumbnail","category-california","tag-billionaries","tag-california","tag-california-headlines","tag-california-news","tag-healthcare","tag-innovation","tag-silicon-valley","tag-taxes"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/421250","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=421250"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/421250\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/421251"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=421250"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=421250"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=421250"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}