Stop whining! California promises to tax away 5% of your net worth ONLY ONCE (for now)

Photo above - "The wifi is booming". The migration from California to Texas might be too, with the latest billionaires' tax.

Musk and Bezos – good timing. You made a clean getaway. Zuckerberg, Steve Ballmer, Larry Page . . . there’s still time. California is planning – as a one time only, emergency measure – to take 5% of your entire net worth in 2026. See link below. Just once, they promise !

It’s not the law yet, however. This first-in-the-nation wealth tax will be on the ballot in November 2026. Isn’t this point at which both houses of congress flip back to the democrat party? California’s 5% net worth tax will take effect on ALL assets you own as of December 31, 2025, as long as California was your legal residence at any point in 2025 or 2026. (Note to legal scholars - this could be an ex post facto law, which is probably unconstitutional.) Simply moving your $100 billion bank account to Florida or Switzerland while you continue to attend Lakers games and dine at Nobu after probably isn’t going to help.

Who would propose such an outlandish tax idea? The state employees labor union (SEIU). They are worried that their future pay raises might be impeded by less tax revenue sharing from DC.

Let’s set aside the obvious problem that transferring money from one set of taxpayers to others thousands of miles away could be rife with fraud and administrative costs. That’s the business model of the US congress, in fact. (Read this month’s anniversary issue of “The Nation” if you want to learn more). Taking money out of your right front pocket and stuffing it nervously into your left back pocket doesn’t make you any wealthier. It just increases the odds that your money might blow away in the wind during the process.

California’s state employee's union deserves at least some kudos, however. They want to fund California’s golden state – luxury state amenities by taxing their own residents. That’s a laudatory starting point. Unfortunately, that will only work if someone builds a wall to keep billionaires from migrating someplace else. You’d think state employees – who take care of the roads, trains, and airports – would be alert to this possibility.

To be fair and balanced, let’s look at the other side of the ledger. If you do move, Miami is not on the same level as Los Angeles. Plus, Jeff Bezos lives there, and you might run into him – or his entourage, or his naval armada – at an inconvenient moment. Dallas sets the bar even lower for prestige, even if your neighbor didn’t put cow horns on the Cadillac Check out the billionaire oilmen who appear in Xfinity’s “Wifi is Booming” TV ad. If you gaze upward and ascend to London, Monaco, or Zurich then you might feel justified in looking down on the people left behind in LA. Plus, none of those cities have a 5% wealth tax either.

Even if this 2026 referendum passes, there is no obligation for Governor Newsom to sign it. And he has good reasons not to. Newsom already has the lead for the lead for the democrat party 2028 presidential nomination. And Gavin’s own net worth is $100 billion (no foolin’ – this shocked me too). Governor Newsom has 4 school aged kids, so he might be interested in generational wealth planning. The federal government is already going to confiscate 40% of Gavin's $100 billion fortune the moment he dies. California might want to follow the same rule – wait for someone to kick the bucket before demanding a ginormous windfall.

I’m just sayin’ . . .


California faces new proposed wealth tax - Inside SALT