Transcription
Billionaires are up in arms about California's proposed wealth tax. Now, here's the truth and why you should support it.
The proposed tax is a one-time 5% tax on people who had a net worth of at least $1 billion on January 1st, 2026. California's roughly 200 billionaires would be able to pay their share over a 5-year period. The revenue from the tax, which is expected to hit $100 billion, would go toward covering the devastating funding cuts for California's Medicaid system caused by Trump's big ugly bill.
Now, remember that same tax bill doled out far more in tax cuts for the richest Americans, including the California billionaires now crying fowl. Now, a few California billionaires will make headlines by leaving the state in a huff or by threatening to move assets. But if they lived in the state on January 1st, they'll be on the hook for the tax anyway. In any case, research shows that when states increase taxes on their richest residents, the vast majority of them stay put simply because they can afford to. Massachusetts increased taxes on millionaires and billionaires in 2023. What happened? The rich didn't move and the state generated billions in revenue that's now going to public education and transportation.
Let's be real. California's billionaires are wealthier than they've ever been. Take the CEO of AI chipmaker Nvidia. His wealth grew by $124 billion over the past 5 years, and he'd have to pay just under $10 billion in the next five under the California proposal. That's an outcome that he says is "perfectly fine with it" because he seems to understand the benefits of operating in a state that's also the world's fourth largest economy. Perhaps his fellow billionaires should listen.
Meanwhile, 15 million poor and working-class Californians, including 5 million children who rely on California's Medicaid system, would be able to go to the doctor and afford life-saving medicine. Why are we focused on the complaints of a handful of billionaires instead of the needs of millions of their neighbors?
California's billionaire tax isn't the final answer to America's disgraceful inequalities of wealth and income, of course, but it's a start. It may open the way to further efforts to reign in the obscenely rich, which is what some billionaires probably fear. These efforts are essential not only to funding what most people need, but also to preserving our democracy. It's time to tax the