Bernie-backed tax on billionaires is TOO extreme even for California

A proposition imposing a new tax on billionaires in California has been defeated despite being endorsed by notable far-left politicians.

Proposition 40 called for imposing a one-time tax that would apply only to billionaires, confiscating 5% of their net worth with some assets exempted from the calculation. In order to pre-empt billionaires leaving the state to avoid the tax, it would be imposed retroactively to residents living in California on Jan. 1, 2026.

'It will be the beginning of not only a broader U.S.-wide movement, ultimately paving the way for a federal wealth tax.'

Opponents of Proposition 40 said the tax would backfire and lead to less tax revenue as billionaires would flee the state for lower-tax locales.

Supporters hoped the proposition would spark a global movement to tax the ultra-wealthy in order to fund massive increases in social spending. Among the supporters of the bill were Sen. Bernie Sanders (I-Vt.) and Rep. Ro Khanna (D-Calif.).

"If California says, 'We can tax billionaires. We can tax the wealthiest, most powerful people in the world,' it will be the beginning of not only a broader U.S.-wide movement, ultimately paving the way for a federal wealth tax — but I think it will be the beginning of an international movement," said economist Gabriel Zucman to the "Planet Money" podcast.

Zucman estimated the tax would bring in $100 billion in revenue, which would add up to about a third of the total California budget.

But others like Stanford economist and Hoover Institution senior fellow Joshua Rauh came to a different conclusion based on estimates of billionaires fleeing the state to avoid the tax.

"It would not raise $100 billion for the state," Rauh said. "We calculate that Proposition 40 would cost the state of California $39 billion."

California voters shot down Prop 40 last Tuesday with 52.8% voting no and 47.2% voting yes, according to the AP and NBC News.

RELATED: Bernie Sanders gets obliterated for dragging Melania into left-wing criticism of WaPo layoffs

One estimate found that opponents of the proposition had poured about $333 million into defeating the billionaires' tax.

Although he was hopeful for the proposition to pass, even Zucman admitted that other ultra-wealthy taxes had a dismal track record of success in other countries.

Like Blaze News? Bypass the censors, sign up for our newsletters, and get stories like this direct to your inbox. Sign up here!

More from this network:
Domains for Sale · GOTPeople.org · TheDSAPlatform · The Truth About Socialism

Donate to GOTPeople.org