Only in California would a state attack the hand that feeds it. A ballot measure called the “2026 Billionaire Tax Act” proposes a one-time 5 percent wealth tax on the net worth of residents with assets (not income) exceeding $1 billion.
The logic behind this tax is as simple as it is misleading. Proponents point to 200 California billionaires with a combined net worth of $2 trillion, claiming they are “under-taxed” given their wealth. But here lies the blatant dishonesty: California already taxes income, not accumulated wealth. These billionaires have already paid tax on their past wealth! Comparing an annual income tax bill to lifetime net worth is not just irrelevant—it is intellectual dishonesty designed to confuse the issue and steal private property from the wealthy.
The 200 Chosen Ones
Those 200 individuals contributed roughly $30 billion in taxes annually, accounting for 23 percent of total income tax revenue of around $129.6 billion. Thus, a mere 200 people are shouldering over 23 percent of the tax burden. When the top one percent of earners already account for 40 percent of total collections, one has to wonder: how much longer can California rely on such a fragile, top-heavy system before it collapses under its own weight?
Most Americans already resent the estate tax because it taxes accumulated wealth that was already taxed when it was first earned as income. A wealth tax adds a third layer to this socialist cake. Under this system, the same dollar is taxed first as income, then annually as wealth, and finally as part of an estate upon death. It is a punitive cycle that punishes hard work, intelligent investing and saving, while encouraging indolence and entitlement.
Leftist policymakers seem to view the private sector not as an engine of wealth creation but as a piggy bank to fund their agenda. Sadly, these anti-growth policies do more than imperil the state’s long-term budget. They actively undermine the prosperity that once made the Golden State, golden.
An Immoral Retroactive Bill
This tax would apply retroactively to anyone living in California as of January 1, 2026, even though voters would not see the measure until November. If a billionaire was a California resident on New Year’s Day and the law passes at the end of next year, they pay up—regardless of where they reside when the ink dries.
Once the infrastructure for such a tax is in place, thresholds tend to be lowered and rates tend to rise. It is a slippery slope that would likely end in a constitutional firefight and a government growing well beyond its means.
The Impossibility of Assessing Wealth Objectively
Determining wealth is more complicated than measuring income. While the share price of publicly traded stock is known at the closing bell, placing a value on illiquid assets is a guessing game because market prices can vary widely. Auditors must objectively value a private business, a piece of real estate, fine art, or vintage jewelry every year.
Perhaps the cruelest irony is that any wealth tax is completely detached from the ability to pay. Unlike income tax or capital gains, which are taxed when an asset is sold and cash is on hand, wealth and estate taxes are imposed simply because one owns the asset.
This forces “asset-rich, cash-poor” taxpayers into a corner, potentially compelling them to sell properties or businesses just to satisfy the IRS—a move that risks job losses, market instability, and personal livelihoods alike.
The Legal Quagmire
If the measure passes, it faces a constitutional minefield. Legal experts argue that applying a new tax retroactively is unprecedented and likely unconstitutional. Furthermore, taxing anything generated in California but existing outside of the state violates the 1824 Dormant Commerce Clause of the U.S. Constitution, and targeting a specific group—200 billionaires—smacks of punishment without trial.
The Supreme Court has never looked kindly on wealth taxes, and with tens of billions of dollars at stake, the litigation will be endless. For proponents, perhaps the message is more important than the money. The socialists’ mantra of “tax the rich” is nothing more than hatred of the inequality created by hard work in a free-market economy.
The End of an Era?
At its heart, this matter concerns the implementation of socialism and the advanced breakdown of a social contract. For decades, California offered a simple deal: build the future here and keep the spoils. That deal is now dead. The state is rewriting the terms in line with Marxist theory, asserting that a portion of the wealth generated within its borders (regardless of where it is invested) belongs to the public. This is simply appropriation (stealing), as was done on a mass scale by communist Russia, China, Cuba and Venezuela.
This proposed bill is state-sanctioned theft. The ambiguity is gone. Some wealthy individuals are voting with their feet by leaving the state. California is gambling its future and its status as the world’s tech hub on the arrogant belief that it is too important to leave. California’s socialists are about to find out whether they are right.
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