This November, Californians will vote on Prop. 40, which would become the first wealth tax in modern U.S. history. But despite liberal rallying cries to “tax the rich,” Democrat leaders in the Golden State are scrambling to kill the proposal – implicitly acknowledging that progressive tax-and-spend schemes won’t deliver what they promise.
As Ballotpedia explains, Prop. 40 would specifically “levy a one-time 5% tax on the accumulated wealth of taxpayers and trusts with covered assets valued over $1 billion.” That tax would notably apply to “shares of capital stock, bonds or other evidences of indebtedness, and any legal or equitable interest.” The tax revenue would supposedly be used to fund “state health care programs, food assistance programs, and public education.”
Progressive leaders like Senator Bernie Sanders (I-VT) and California Congressman Ro Khanna, a potential 2028 presidential contender, have championed the proposal, which they hope will help build momentum for a national wealth tax.
Billionaires in the state would have the option to spread the payment out over five years, but they would be hit with a 7.5 percent charge on any unpaid balance – meaning the effective tax would be much higher than five percent. Moreover, the tax applies not just to income, but to the value of all assets, including stocks and bonds. This means that many wealthy individuals would have to sell stocks just to pay the tax, likely having ripple effects throughout the economy and affecting the portfolios of other far less wealthy individuals.
The politically powerful Service Employees International Union (SEIU), which represents health care workers, originally pushed for the idea.
“Massive cuts to federal health care funding are driving California towards a health care collapse,” a website for Prop. 40 explains. “The federal funding cuts will strip roughly $100 billion from California health care over the next five years.” Playing on populist sentiments, the SEIU says the money “would protect health care jobs and ensure working people and families can get the care they need.”
But Democrat Governor Gavin Newsom, another 2028 presidential contender, has come out against the proposal – no doubt recognizing that it would be economically disastrous for his state. Even the prospect of it passing has already led several billionaires to flee to states with more favorable tax policies.
Six of the state’s roughly 200 billionaires have left so far, according to Fortune. The tax would apply to anyone living in the state as of January 1, 2026, giving the wealthy a strong incentive to leave by December 31, 2025, as some did. These billionaires, including Peter Thiel, former Uber CEO Travis Kalanick, and Google co-founders Larry Page and Sergey Brin, would have collectively paid $27 billion of the projected $100 billion in revenue under the proposed tax.
Newsom said he will be voting no on Prop. 40. “We’re competing with 50 states,” he said in February. “Capital flows and move(s). That’s real. It’s not imagined. It’s very, very real,” the governor said, according to CNN.
However, Newsom has hardly abandoned the idea of a wealth tax – he just doesn’t want it in only his state. As AMAC Newsline reported last week, Newsom now supports a national wealth tax. While the wealthy can flee California, it is much more difficult for them to flee the country entirely.
The SEIU notably will be without many of its normal labor union ally foot soldiers as it looks to turn out voters this November. The Guardian reports that “powerful organizations in the state have also stepped in to oppose it.”
New opponents include “the California Teachers Association and the State Building and Construction Trades Council of California, along with health care groups, including the California Medical Association and Planned Parenthood Affiliates of California.”
The groups are driven by a healthy distrust of politicians to keep their word and questions about whether the tax will provide “long-term” stability.
“These groups say the ballot measure does not have a long-term funding path and has no guarantees that the one-time lump sum will go to those who need it most,” The Guardian reports.
Those concerns are valid, since the state faces nearly $75 billion in budget deficits in the next three years, according to projections from the California Legislature’s fiscal analysis team. California already has among the highest tax burdens in the country. Nothing in recent history suggests that money raised from a wealth tax would be spent any more wisely than the roughly $300 billion in taxes that the state already brings in. California has a spending problem, not a revenue problem.
The economic fallout from the tax could also be drastic, according to experts at the Tax Foundation.
Because of “poorly drafted” language, the law could effectively apply a more than 100 percent tax on certain assets. Wealth is fluid, so someone could be paying a tax on the former value of an asset that has since depreciated. Billionaires could also be forced to pay the tax based on the value of their voting shares in a company, even if that value is more than their actual stake in the company.
The law’s wording could also force billionaires to “sell off a significant portion of their shares” which “could send stock prices plummeting to the detriment of tech employees and investors of all stripes, including ordinary workers,” the Tax Foundation concluded.
Moreover, if the last 100 years of tax policy have proven anything, it’s that the government is never satisfied. The wealth tax may be targeting billionaires now, but inevitably their definition of who counts as “wealthy” will expand until it includes anyone who has managed to accumulate even a modest amount of wealth.
“Tax the rich” is a good bumper sticker slogan, and it’s an effective political tool for socialist politicians looking to stoke anger and resentment. But catchy slogans and soundbites that play well on TikTok and Instagram do not translate into sound economic policy.
Even California’s delusional Democrat leaders are beginning to acknowledge this reality. The only question is if they’ll be able to close the Pandora’s box that their rhetoric has opened. It will now be up to the voters to decide.
Matt Lamb is an AMAC Newsline contributor and associate editor for The College Fix. He previously worked for Students for Life of America, Students for Life Action, and Turning Point USA. He previously interned for Open the Books. His writing has also appeared in the Washington Examiner, The Federalist, LifeSiteNews, Human Life Review, Headline USA, and other outlets. The opinions expressed are his own. Follow him @mattlamb22 on X.
The old adage still applies:
You can’t tax your way to prosperity.
If the Dems had any common sense, they could increase revenue by clawing back the money that was stolen by the rampant waste, fraud and abuse.
(Yeah, I know, don’t hold your breath)
Solution for their healthcare costs. Simple, stop covering every illegal who has crossed the border. Medical is for LEGAL citizens.
Again, politicians are the stupidest people on the planet. It’s easy to target successful people and label them as the root of evil, but putting the very people that fund their campaigns in their tax crosshairs is beyond ignorance. A national billionaire tax is testament what Newsom and democrats would do to the rest of the country and a clear indication of the insanity of those who will not see the destructive ramifications. Of course these vipers know they can mobilize the ignorant to support this exclusive tax after all, they themselves are only millionaires and it doesn’t apply to them.
California is Bankrupt , since 2018 well over 1000 Major Corporations have left the State . California is now a Communist controlled Welfare State , supported by our own Federal Government with Billions in Welfare Money to keep it from going under .
So, the looney liberals want to chase away the wealthy people, like England did??? Can’t fix stupid!!!!!
Love it that some Democrat leaders realize they are in a “minefield” and have to find a way out. Again, it will be up to the voter to make the right decision. If it passes, billionaires will vacate CA in a heartbeat and probably fight CA through favorable court systems to keep their wealth intact. Just have to wait and see.
If California were really serious about ending their budget problems, they could do so very easily in one fell swoop: stop supporting the untold number of illegals that reside in California and save that money for the benefit of the citizens. But of course that will not happen since flooding the country with unassimilable illegals who want nothing more than to get handouts and freebies is the goal of the Left, who will also use these people to vote and help steal even more elections than they are stealing now.
So now that he realizes if you only do it in your state people will leave, he wants it for all states so they would have to leave the country. Now there’s a real leadership approach we don’t need in the White House. JMO
Charging tax on unrealized gains is absurd. How would they handle a loss on that investment, and would they refund the tax paid on gains that never materialized? This tax idea is completely ridiculous.
I guess it’s impossible to cut spending when you need money to buy votes.
They won’t stop spending but they invent new taxes. These demonrats will tax us until all go broke Yet the demonrat politicians are the wealthiest
It’s called theft. No two ways about it.
These greedy, disingenuous idiots think that grabbing a wealth tax will fix their healthcare system? How about throwing the illegals off the system and sending ICE in to deport them?
The progressives continue to squawk about not having enough money to do what they want. Of course not, it is because they want to hand out money to everyone else other than legal citizens! If they focused on legal citizens, there would be plenty of money and there had been for a number of years. The shortfalls happened once illegals started to collect off of systems that they NEVER paid into nor were EVER eligible for.
If they were to get a national wealth tax, the same thing would happen here as happened in Europe. The wealthy left, and those not wealthy had to pick up the bill.
Besides being completely unConstitutional, what do these idiots think of their subjects?
These are the policy proposals that you get when they ultimately run out of everyone else’s money that is used for buying votes to keep their sorry butt’s in power!
iF you tax the wealthiest 10% of Americans who theoretically own half of the wealth in the United States, then it’s also easy to forget that this same 10% are the ones that pay 90% of the income tax in the USA . so if you impoverish the wealthiest 10% , who will then pay all of the taxes which they then would NOT be paying ???
Democrats and liberals always have ideas which they seldom think through to the conclusion and the implosion of the Result of those same ideas !!!
Why does the political arena seem to attract so many ignorant people?
Their philosophy seems to be; Let’s kill the engine, that way the boxcars and the
caboose will be so much better off.
There should be a civics and economics course with a requirement to pass, before
any American can run for office. Then we wouldn’t have all these kinder garden
dropouts and communists in our government.
The voters have to show common sense and budget restraint. This tax is nothing more than destroy this country. Bring her down. They are not looking at making CA into an economic flourishing state. No they have taxed it to capacity because they can’t spend cautiously or have oversight. The train to nowhere, the catastrophic fire that had dry reservoirs and dry hydrants, no evacuation program in place so home after home burned. And they still haven’t rebuild. Why? Because rich developers want to develop this high priced ground for the common man. So they can milk the tenants out of their rent money. They got rich of the rich now they are working on the wealthy and the middle class and the poor are paying for the perks for Newsom and Bass and the other communists running things in CA. Every homeless person was given 20,000 dollars each with the huge help of the homeless bill. Where did that money go. The same way this wealth tax will go. Not into healthcare, more education. Create a budget and oversight you will be surprised how much money there is to be used for the purpose it was proposed. Only they want to tax everyone so they are poor, can’t move away because they will suggest this tax starts 5 years ago. Anyone living in CA on January 1 of 2026 will have to pay it. That is freedom of movement. We the people are next. No more public transportation. Restrictions on when you can drive outside the 15 minute cities we all will be living in. Taxes are necessary evil. But a lot of that tax money never ends up where it was intended for. That is why they were so against tariffs. No way to siphon off some of the top. Of course Newsom doesn’t want it in his state but okay for the country because then the rich billionaires wouldn’t leave his state. This tax proposal is a death knelt for the economy in CA but also nationwide. Fix your spending problem first. And have oversight on the programs in place now.
How about saving some healthcare and education moves by disallowing illegal aliens the privileges of state residents? I know it sounds cruel but CA has invited them in and is now a huge welfare state. They have to get that in control before “blaming” billionaires for being billionaires.
California brags about having the world’s 7th or 8th largest GDP in the world, yet they are broke every year. Maybe if they stopped all of the. freebies and taxpayer based “programs”, they wouldn’t keep drawing in people that don’t work, don’t want to work, or are illegals that go there simply because they know they will be “taken care of”. I personally know people that have nothing wrong with them yet they don’t work and they have no shame about stealing tax dollars from their neighbors that are working hard for their money. Gavin Newsom, and many other liberal politicians refuse to admit that when you keep giving things away for “free”, without requiring people to work for them, the amount of people that get in line for all of that “free stuff” will only keep increasing. That leaves less and less people available to pay for all of the programs and free stuff. If you start taxing people because they make a lot of money, they will simply leave, and/or lower their tax burden, maybe by closing factories and businesses that now bring jobs to the state. I am not a billionaire or a millionaire, and I don’t expect the rich to have to pay more than the equivalent amount that everyone else pays. Don’t take away the incentive to make money and create jobs, and anytime a politician says “this is a one time tax”, you should run away as fast as you can. When is the last time politicians took a pay cut or didn’t vote themselves raises? Let charity begin at home, let’s see the politicians give up some of their salaries and many of their perks before any new taxes. Don’t hold your breath.
How many billionaires will donate to dem campaigns, knowing they do want to tax them more than everyone else? In fact, billionaires ALREADY pay roughly 40%of total taxes at tax time, millionaires pay around 30%, while the all the rest of us only pay 30%.
The idea that they don’t pay taxes is BS…
It’s pretty hysterical to think a state that vehemently denies any fraud or waste but can’t account for money spent on illegals and homeless thinks anyone wants to trust them with more billions. Name one single program that has accomplished its goals.
Still waiting…yeah, they just need more money —jahahahah.
Considering opposition by the Teacher’s Assn., Trades, etc. I can’t imagine them voting Democrat again. IMO a good % have already made that decision.
The health care collapse in California and throughout the United States is all due to thief and the Democratic Party and their allies allowing illegal immigrates to use it! The same goes for Social Security, the Democratic Party and their allies allowing illegals and individuals to steal from it!
Gavin Newsom said he will not vote for Prop 40, I can almost guarantee he is lying! After all he has bankrupted California, then the Democratic Party and their allies will bankrupt our country! The Democratic Party and their allies are no good and they are controlled by the Socialist, Marxist, Muslims/Hamas, Communist CCP! The Democratic Party and their allies have all committed treason against America!
The only way to stop this madness anywhere would be to strip the proponents of their wealth and put it to the same cause their put our taxes to. Unless they are forced to taste their medicine, they will not stop the assault on the tax payer. Let them feed the illegals they so protect.
Of coerce the governor what’s this because he is pocketing the health care money that no one seem to care about.
Dear Dems,
Please engage brain before mouth…
There is one word for crap like this “tax”: COMMUNISM! You made too much money, so you have to give some of it back so we can give it to those who choose to sit on their butts instead of trying to earn money the “old fashioned way”. You know, working!
I don’t begrudge seniors and the truly disabled some cash to help them survive, but the lay-abouts and ILLEGALS who are living off the public teat…
Victory awesome Hooray
If things keep going like this in California, it makes sense for people to leave that state, not to move to it. The Democrats have totally killed the state. This is not an exaggeration! I’m not voting for Prop 40, nor am I voting for anything that gives this state any more of my money, but I can’t say how people are going to vote here. There are a lot of somewhat crazy people in California that think taxing the rich is great, but then they lose their jobs and get mad when the people that provide the jobs move them out of California because of these unfair taxes. You’d think this would be a lesson learned, but it’s not.
That “poorly drafted” language is, in fact, perfectly and deliberately drafted to leave as many open holes for the future as possible. Please don’t tell me this isn’t the plan. After all, it will only take 200 people – the 200 CA billionaires – to move out of CA to complete nullify any wealth tax on billionaires. After that, everyone with anything will need to become a valid target.
Curious that there is no discussion as to what “billionaires” buy. The liberals are brain dead when it comes to economics. They only go after taxes, but there is no accountability and that is why in 2026 we are seeing massive fraud with health and child care.
To be fair billionaires spend their money on houses, boat, planes, travel and all sorts of things which are taxed and some luxury items have special taxes attached to them. When the rich are buying the downstream populous benefit from the jobs that are sustained or created. When they invest their money in industry, they create jobs and taxable dollars.
The short sighted liberals are shooting themselves into economic collapse when the “billionaires” leave the states, cities or even the country.
In communist controlled countries the only rich are the party heads and their money supporters. The same system and results will be prevalent here is a few years. The billionaires here will support any system to save their wealth. Everyone else will be taxed until the state has it all.
This isn’t 1944, rich folks can move in and out of states with ease. Sounds like even Gav is starting to get that.
Even the Dumacrats, or as I like to call them “commicrats”, should be able to understand that article. Extremely well written, very informative.
A favorite saying of mine;
”those that can do,do.
those that can’t do, teach, and those that can’t do and can’t teach, become democrat politicians.”
If the Democrats are for it and the unions are for it you know it’s a really bad idea very. That group is never had a good idea
another reason to dissolve this union and form a more perfect union without these idiots using opm-other-peoples-money to finance their idiocy. let ’em have their own country so everyone can see how their policies play out. we know the story so better to split now and reform a more perfect union devoid of those idiots and their natural end.
It’s disheartening to see how completely foolish the Evil is within the leftwing Communists Democrats. The lack of ANY common sense at all is just disgusting.
Take the bird feeders down. Once the free food is gone, they stop coming, and you will have a surplus of resources.
Remember those good ol’ days when the money people worked for belonged to them? No longer. The taxpayer, rich or poor, is merely a pigeon standing between a big government democrat and “other people’s money.”
The REAL downside to Kalifornia weirdos moving to any Red state is the fact said weirdos move and begin voting in the Red state same as they did in Kalifornia. More and more of them move, vote, and sooner or later the Red state goes down the tubes, too. State becomes Purple, then Blue, then is just as hosed as Kalifornia was to begin with…..
Politicians are a pox on ‘Murica.
As a host on WBAP often quips-‘Never had a job working for a poor man.” Our capitalist system is not perfect and has its flaws and abuses that need to be restructured, but turning off the fuel to the engine isn’t smart.
All a wealth tax will do is give corrupt politicians more money in their fraud operations. Anyone with a brain knows that government never takes less in taxes. This will not benefit the regular working class at all. Our taxes will continue to increase through various new taxes, fees and licensing. Look how much money has been given for homelessness which turns out to be an absolute fraud scheme. Where does that federal money go? Cities require local tax payers to fund the purchase of old motels to house people temporarily. NGO’s are funded by tax dollars that do little to nothing for the homeless. No special taxes should be levied towards those that are successful in life. They should pay income taxes like everyone else. Meanwhile the multimillionaire politicians behind these wealth taxes use every means available to reduce their tax burdens.
Ummmmmm, the stupid dems don’t realize it’s the wealthy people whose businesses provide EMPLOYMENT for the rank and file of this country! The demonrats want to figure out how to get more taxes for their pet projects (example: Free health care for illegals) My mom always said Republicans always try to keep taxes down whereas dems always try to find ways to separate taxpayers from MORE of THEIR money!! Never voted demonratic in my life and never will.
The Land of Fruits & Nuts!
Right off the bat, those “one time only” taxes have a way of being continually renewed. You can bank on it.
If Bernie wants a national wealth tax then he’ll have to tax himself right?
Once again, we have a clear example that government at any level does not have a tax revenue problem; it has a tax revenue SPENDING problem. The answer, as wiser Dems like JFK realized, is to lower the tax burden to increase tax revenues. Lowering taxes unleashes investment and growth, thereby increasing the taxable amount. Today’s demorats are actually stupid people.
If the Feds are cutting $100Billion for Cal. then just get rid of the Illegal Aliens in your state! If those Illegals are so “Great” for the U.S. then send them back to their home Countries and they can make Them GREAT too!