This is the ultimate story of "other people's money." California already has an extremely progressive income tax structure:
The state budget in California is already largely dependent on income taxes paid by its highest earners. Because of that, revenues are prone to volatility, hinging on capital gains from investments, bonuses to executives and windfalls from new stock offerings, and are notoriously difficult for the state to predict.
But in blue states, it's never enough. So with income taxes maxed out, it's time to think outside the box and go for a wealth tax. The legality and morality of a wealth tax is beside the point; California needs cash!
The billionaires in California are waking up to the fact that they're not welcome there:
An increasing number of companies and investors have decided it isn’t worth the hassle to be in the state and are taking their companies and their homes to other states with lower taxes and less regulation.“I promise you this will be the final straw,” Jessie Powell, co-founder of the Bay Area-based crypto exchange platform Kraken, wrote on X. “Billionaires will take with them all of their spending, hobbies, philanthropy and jobs.”
Although the article questions whether the referendum will get the necessary signatures and pass in a general election, I think it's a foregone conclusion. There's nothing that people love more than having other people pay for things. Do it, California.
Recommendation for 2026: invest in Texas commercial real estate.
Related - Ignorant of history, California has never heard of the David Tepper effect.
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