Concerning California's Wealth Tax Proposal - Part 3

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Political Polls: Manufactured News - Part 3

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Concerning California's Wealth Tax Proposal - Part 1

Concerning California's Wealth Tax Proposal - Part 2

California’s Ballot Proposal

California’s ballot proposal for a wealth tax is not complicated. It calls for every person in California whose net worth exceeds $1 billion to pay 5% of their net worth to the state. This would include every billionaire who resided in the state as of January 1, 2026 and would involve all assets located in the state as of that date. The tax would be due in 2027 with the option of paying the tax over a span of five years – with interest, of course.

The odds of reaching the required 875K signatures to get the proposal on November’s ballot seem pretty high. Assuming that number is reached, the odds are even higher that the people of California will overwhelmingly vote in favor. As of January 1, 2026, California boasted 214 billionaires. That is 214 individuals out of a population of more than 39 million. That means that 99.9995% of the population will have the chance to vote in favor of the wealthiest .0005% paying a hefty $100 billion tax without putting themselves at risk. Pretty nice gig if you can get it.

Short-Term Consequences

On the surface, the proposal seems straightforward. While a wealth tax in California would cost billionaires a considerable portion of their net worth, and would certainly fill the state’s coffers, larger issues are in play. It’s what follows that really matters and the consequences will be dramatic and far-reaching.

It stands to reason that the first consequence of a wealth tax in California will be, and already is, the exodus of many of those with a net worth of over $1 billion. In fact, it is reported that six billionaires departed the state prior to January 1, 2026 to avoid the tax. The portion of the estimated $100 billion in tax revenue that would have come from those six is thought to be about $27 billion. That’s quite a chunk.

Some people may see the departure of billionaires from the state of California as an act of greed. After all, how many widgets can someone buy? Isn’t that kind of wealth the very definition of greed? It seems they should be willing to simply fork over the money and get on with life. However, these men and women probably see the bigger picture more clearly than those who are not subject to this particular tax. They see the long-term consequences.

Long-Term Consequences

The California wealth tax proposal should be weighed not for its short-term consequences, which are minimal, but for long-term implications. From a long-term perspective, this should not be seen as merely a wealth tax proposal, but as a test run. Here’s what will undoubtedly happens if California’s proposal passes this November and is ultimately upheld by the courts.

Most Californians are likely oblivious to the fact that, by passing a wealth tax, they are ultimately shooting themselves in the foot. While the proposal is being advertised as a singular event, where the government charges this tax one time and that is the end of it, Californians would be wise to reconsider. If the California government discovers that a wealth tax is constitutional, this will happen again.

The important part is that when that happens, more billionaires will leave. In fact it will reach the point where California will have no billionaires left to soak. When that happens, the state will be forced to lower the bar as the benefits of the wealth tax to the state will be far too tempting. After all, if there are no billionaires, they would necessarily need to drop the net worth threshold to $500 million, or perhaps to $250 million, particularly with income taxes dwindling from the exodus of the wealthiest citizens. Eventually that number would reach down to the middle class – the very people who initially voted in favor of the proposal in 2026.

The next thing to consider is how California’s success might impact the rest of the country. No doubt other states would see California drawing in hundreds of billions of dollars into the state coffers and, as a result, resort to their own wealth tax. Of course, this would happen primarily in states where Democrats are in control, since this is unlikely to happen in Republican-led states. Still, there are enough Democrat-led states to profoundly impact the nation economically.

If California ends up passing their wealth tax proposal and the courts uphold that stream of revenue expect other states to follow. That will force the wealthy to leave those states and move to states where Republicans are in charge. Over the long term, that will boost the populations and the wealth in Republican-led states. This in turn, will see dwindling populations in blue states and burgeoning populations in red states, ultimately changing the balance of representation in Washington over time. However, that is definitely a long-term item.

Conclusion

Eventually, the taxation of wealth will be attempted at the federal level. It has already been unsuccessfully proposed a number of times. Indeed, there are those in Washington who would be more than happy to take from the rich. In fact, at the time of this writing, Elizabeth Warren is in the process of proposing a 5% wealth tax on every individual in the U.S. with a net worth of $50 million or more. This means what has been labeled as long-term consequences in this article are already beginning to take shape. With the success of California under their wings, can there be any doubt that attempts will continue at the federal level until they find success? Additionally, a $50 million threshold would not last long if such a tax is found constitutional. In the next proposal it may well be lowered to $25 million or $10 million or $5 million. Also, keep in mind that401k’s and other forms of retirement could be included in any calculation.

If passed it will likely take a while (at least a year or two) for the California proposal to make its way through the courts, and even longer for the consequences discussed here to come to fruition. However, if and when that happens, remember this article. Consider this a word of caution to those in California who are about to vote on a proposal that could forever alter America – and not in a good way. You have been forewarned.

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