Building on last week’s divide, the California debate has sharpened around the mechanics and consequences of the proposed one‑time 5% wealth tax on billionaires. Rep. Ro Khanna (D-CA) is pushing for a compromise amid backlash from industry leaders like Sergey Brin and others, who are funding opposition campaigns and threatening to relocate.
Gov. Gavin Newsom remains firmly opposed on competitiveness grounds, exposing some fault lines among California’s Democrats.
California
Teamsters union endorses California’s proposed 5% wealth tax on billionaires – Fox Business
Teamsters California formally endorsed California’s one-time 5% wealth tax ballot initiative. Supporters of the initiative frame the tax as protecting workers amid AI-driven job threats, while Gov. Gavin Newsom opposes it as harmful to the state’s economy, and several prominent billionaires have already moved assets or signaled relocation in response.
Billionaire Tax Backlash Has Khanna Seeking Compromise – Bloomberg Law
Rep. Ro Khanna (D-CA) is pushing for a compromise on the proposed wealth tax ballot initiative amid backlash from industry leaders like Sergey Brin and others, who are funding opposition campaigns and threatening to relocate. Industry and union leaders will meet in late February to explore alternatives such as taxing loans taken out against current assets rather than taxing unrealized gains that may involve illiquid stock, which are intended to address tech concerns over the wealth tax proposal’s potential to force company sales or create other impediments for startups. Rep. Khanna highlighted the importance of preserving Silicon Valley’s “innovation miracle” by excluding illiquid holdings, non-voting shares, and emerging ventures from taxes, while finding revenue to offset federal Medicaid cuts.
Majority of California voters back billionaire wealth tax even when aware of economic risks, survey shows – FOX Business
According to a new survey, 60% of likely California voters support the billionaire wealth tax, even as majority of those same respondents say the move would spark job losses and business exodus. Gov. Gavin Newsom opposes the measure, warning it could reduce funding for schools, public safety, and other core services and would not fix the state’s structural budget problems.
The ultra rich say they’ll leave California if a wealth tax passes — history shows otherwise – Times of San Diego
The author argues that threats of billionaire and business flight over the proposed wealth tax are likely overstated. It discussed historical data from Massachusetts, New Jersey and New York tax hikes showing minimal net outmigration due to deep business, family, and lifestyle ties keeping most wealthy residents in place.
Why the California wealth tax proposal is great news for Texas – The Dallas Morning News
The author argues that California’s wealth tax proposal could drive billionaires and capital to Texas. Texas’s low-tax (zero personal income tax), business-friendly advantages could accelerate this shift in tech and finance sectors.
Californians are asking, is it time to raise taxes on the rich? – Deseret News
Some Patriotic Millionaires back California’s proposed, one-time 5% wealth tax on residents with over $1 billion in net worth. Some tech figures like David Sacks are threatening to leave while supporters of the proposal such as Scott Ellis, argues it’s “not a crazy thing to be rich and patriotic” and that the wealthy should contribute more. Gov. Gavin Newsom opposes the initiative, while Mitt Romney has called for higher contributions from the rich even though stopping short of endorsing a wealth tax.
A 5% wealth tax would drive billionaires out of California – The Economist
The mere prospect of the billionaire tax has prompted vocal pushback and strategic relocations by tech billionaires, alongside warnings from California’s Legislative Analyst’s Office that taxing illiquid, unrealized gains could drive high earners out of state and ultimately shrink the general fund, given the top 1% pay nearly 40% of state income taxes. Economists like Enrico Moretti note that wealthy individuals often move to avoid state-level levies when combined with high income taxes, and Bay Area leaders worry the design would hit startup equity especially hard.
Democratic fault lines emerge over California’s billionaire tax proposal – NBC News
California’s Democrats are divided on the billionaire tax proposal, with Gov. Gavin Newsom and several gubernatorial contenders opposing it while Rep. Ro Khanna and Sen. Bernie Sanders support it, framing the fight as a broader test of the party’s economic agenda ahead of 2028.
Josh Altman sounds alarm on California wealth tax, says workers would pay the price – FOX Business
Real estate broker Josh Altman warned the wealth tax would harm middle-class workers more than billionaires. It discussed how the rich could relocate or restructure assets, leading to job losses, reduced property values, and broader economic pain.
Would California voters actually support a wealth tax on billionaires? – Orange County Register
Gov. Gavin Newsom opposes the proposed billionaire tax as “badly drafted,” warning it could spur wealthy flight; the proposal may also face pushback from other unions and could affect another measure to continue a high‑income surtax through 2030. A poll commissioned by opponents showed a bare plurality when voters heard the official wording, but support fell after a counterargument—leaving voter sentiment uncertain.
A Better Way to Tax Billionaires – Capitol Weekly
The author argues that instead of California’s proposed billionaire tax, lawmakers should curb high-net-worth taxpayers’ “buy, borrow, die” strategy by taxing certain loan proceeds used to fund consumption, using factors like borrower net worth, collateral, loan-to-value, recourse, related-party involvement, and use of proceeds. This approach is feasible, grounded in existing concepts like the constructive sale doctrine, and would better ensure high-net-worth taxpayers realize income for tax purposes without a radical departure from current law.
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