If supporters are able to rack up 874 ,641 signatures, the 2026 Billionaire Tax Act will appear on the Nov. 3 ballot. Should it pass, it will levy “a one-time 5% tax on billionaire wealth.”
Rather than waiting until voters make their decision, a few billionaires have already left California, including PayPal and Palantir co-founder Peter Thiel and Google co-founder Sergey Brin. But it seems they might want to one day return. The former has donated $3 million to the California Business Roundtable, which opposes the tax, while the latter has given “$20 million to an influence group likely to lobby against” it.
There are still about 200 billionaires in California. But that number would likely thin out if the billionaire tax is approved. Though it’s being presented as a one-time measure, there’s a history of temporary taxes becoming permanent. California’s Proposition 30, for instance, was passed by voters in 2012, temporarily raising sales taxes as well as the rate on upper-income taxpayers. The higher personal income tax rate was extended in 2016. Though scheduled to expire (for the second time), union-backed activists want to make the tax hike permanent and are gathering signatures to place it on the fall ballot, where it will be found right there with the Billionaire Tax Act.
New York City Mayor Zohran Mamdani speaks for progressives everywhere when he says “I don’t think we shouldn’t have billionaires.” Robert Reich, University of California, Berkeley professor and adviser to past presidents, wants the country to drive billionaires “to extinction.”
Rep. Ro Khanna, California’s 17th District congressman who has his eye on higher office, is another billionaire tax proponent. Despite building an image as a uniter, he is playing the politics of envy, summoning up an apparently billionaire-caused dystopia of “islands of prosperity” surrounded by “a sea of despair.”
“The income inequality in California,” he has said, “is staggering.”
Another Democrat who share’s Khanna’s dreams of higher office but doesn’t share his position on the tax is Gov. Gavin Newsom. He’s said “it’s really damaging to the state.”
“The impacts are very real — not just substantive economic impacts in terms of the revenue, but start-ups, the indirect impacts of … people questioning long term-commitments, medium-term,” Newsom said. “That’s not what we need right now, at a time of so much uncertainty. Quite the contrary.”
Newsom is arguing from the same perspective as a free-market economist.
“Most billionaires get to be billionaires by serving us, that is, by making us better off. If the government taxes billionaires to make sure they don’t exist, it will hurt the rest of us,” says Hoover Institution fellow David R. Henderson.
American Enterprise Institute Director of Economic Policy Studies Michael Strain argues that “one could conclude” that Amazon founder Jeff Bezos’ net worth of $170 billion “has created over $8 trillion – more than one-third of the United States’ annual GDP – in value for society.”
John Tamny, president of the Parkview Institute and RealClearMarkets editor, believes we should “be falling all over ourselves to hand the billionaires countless humanitarian awards for helping the formerly helpless.”
When they’re not lighting cigars with $100 bills, California billionaires are creating jobs; producing landmark innovations, such as cancer drug Abraxane developed by Patrick Soon-Shiong, a doctor and owner of the Los Angeles Times; and “showering Sacramento with enormous tax revenue” that funds health care, builds schools and buys books for students.
Even rap culture understands the importance of wealth. Jay-Z, whose real name is Shawn Corey Carter and has an estimated net worth of $2.5 billion, is no economist, yet he grasps what so many seem unable — or unwilling — to.
“I can’t help the poor if I’m one of them,” he sings in “Moment of Clarity.” “So I got rich and gave back. To me that’s the win-win.”
Kerry Jackson is the William Clement Fellow in California Reform at the Pacific Research Institute and co-author of The California Left Coast Survivor’s Guide.
