California has billionaires on the mind.
Final week union activists, hoisting big cutouts of cash baggage and a cigar-smoking boss, introduced a proposal to lift Los Angeles metropolis taxes on firms with “overpaid” chief executives.
They rallied in entrance of a logo of the uber wealthy: the futuristic, steel-covered Tesla Diner owned by Elon Musk, the world’s richest man.
In the meantime, a “billionaire tax” proposal prompted a few of the wealthiest Californians to contemplate fleeing the state, amid arguments that they might take their tax income — and the businesses they run — with them, hurting the odd residents the proposal is designed to assist.
The concentrate on taxing the richest of the wealthy comes amid a rising affordability disaster in California, dwelling to the nation’s costliest housing market and highest revenue tax.
Greater than 200 billionaires reside in California, greater than another state, in accordance with a gaggle of regulation and economics professors at UC Berkeley, UC Davis and the College of Missouri who helped draft the statewide billionaire tax proposal, which proponents are hoping to position on the November poll.
And they’re getting richer. The collective wealth of the state’s billionaires surged from $300 billion in 2011 to $2.2 trillion in October 2025, in accordance with a December report by these professors. In Los Angeles, the place the median sale value of $1 million places dwelling possession out of attain for a lot of residents, distinguished billionaires embrace David Geffen, Steven Spielberg and Magic Johnson.
One conspicuous billionaire is particularly unpopular in California: President Trump, who, regardless of campaigning on bringing down the price of dwelling, just lately known as the phrase “affordability” a “con job” as he redecorated the White Home in gold.
“In a deep blue state like California that has voted towards Donald Trump by such giant numbers within the final three elections, voters are much more predisposed to be suspicious of billionaires, as a result of he’s now the particular person with whom they affiliate the standing,” stated Dan Schnur, a politics professor at USC, UC Berkeley and Pepperdine.
The state and native tax-the-billionaires proposals, he stated, are “about retribution,” very like final 12 months’s Proposition 50, which briefly redraws the state’s congressional districts to favor Democrats as a counterweight to Trump’s efforts to extend Republican seats in Texas.
To get the statewide billionaire tax proposal on the November poll, supporters want to gather almost 875,000 signatures by June 24.
The measure would impose a one-time tax of as much as 5% on taxpayers and trusts with belongings, resembling companies, artwork and mental property, valued at greater than $1 billion. It could apply to billionaires who had been residents of the state on Jan. 1, with the choice of spreading the tax fee over 5 years.
Service Workers Worldwide Union-United Healthcare Staff West, its principal backer, stated it would elevate $100 billion. Most of these funds could be used for healthcare applications, with the remaining 10% going to meals help and teaching programs, the union stated.
Suzanne Jimenez, the union’s chief of workers, stated Friday that “catastrophic” federal funding cuts stemming from Trump’s One Massive Lovely Invoice Act will power hospitals to shut, eradicate healthcare jobs and trigger insurance coverage premiums to spike, leaving senior residents and veterans with restricted entry to companies.
The California Funds & Coverage Middle estimates that as many as 3.4 million Californians might lose Medi-Cal protection and rural hospitals might shut except a brand new funding supply is discovered.
Jimenez known as the proposal “a modest tax” that “impacts few folks.”
However Gov. Gavin Newsom vowed to cease the billionaire tax, arguing that California can’t isolate itself from the opposite 49 states.
“We’re in a aggressive surroundings. Folks have this straightforward luxurious, significantly folks of that standing, they have already got two or three properties outdoors the state,” Newsom stated on the New York Instances’ DealBook Summit final month. “It’s a easy situation. You’ve bought to be pragmatic about it.”
The billionaire tax would briefly improve revenues by tens of billions unfold over a number of years, but when billionaires transfer away, the state might lose “a whole bunch of hundreds of thousands of {dollars} or extra per 12 months,” in accordance with the nonpartisan California Legislative Analyst’s Workplace.
A few of California’s wealthiest say they’re certainly heading for the exits.
Andy Fang, the billionaire co-founder of DoorDash, wrote on social media: “I like California. Born and raised there. However silly wealth tax proposals like this make it irresponsible for me to not plan leaving the state.”
Peter Thiel, the billionaire co-founder of PayPal and Palantir, introduced in December that his funding agency opened a brand new Miami workplace. He donated $3 million that month to a political motion committee linked to the California Enterprise Roundtable, which is preventing the measure.
State data present that Google co-founders Larry Web page and Sergey Brin have been chopping ties to California and transferring enterprise pursuits out of state.
Rick Caruso, the billionaire actual property developer who self-funded his shedding 2022 L.A. mayoral marketing campaign to the tune of greater than $100 million, stated in a press release that “the proposed 5% asset tax is a really unhealthy coverage. It can ship nothing it guarantees and as an alternative harm California with misplaced jobs and a whole bunch of hundreds of thousands a 12 months in misplaced income from present revenue taxes.”
Ending months of hypothesis, Caruso introduced Friday he is not going to problem Mayor Karen Bass once more, nor will he run for governor in a race that features billionaire hedge fund founder Tom Steyer.
In Los Angeles, supporters of the “Overpaid CEO Tax” introduced outdoors the Tesla Diner that they have to acquire 140,000 signatures within the subsequent 120 days to get the measure on the November poll. The measure would elevate taxes on firms whose CEOs make not less than 50 occasions greater than their median-paid worker. It could apply solely to firms with 1,000 or extra workers.
The Truthful Video games Coalition, a set of labor teams together with the Los Angeles lecturers union, is sponsoring the measure, which might allocate 70% of the income to housing for working households, 20% to avenue and sidewalk repairs and 5% to after-school applications and entry to recent meals.
Enterprise teams have denounced it, saying it will drive firms out of town.
“Luxurious for just a few, whereas those that prepare dinner, who clear, who construct, who train, who write — the individuals who make town affluent — are stretched to the breaking level,” Kurt Petersen, co-president of the airport and resort employees union Unite Right here Native 11, stated at Musk’s diner, describing it as an avatar for an unjust L.A. economic system.
A related effort to extend taxes on firms with disproportionately paid CEOs is underway in San Francisco, the place voters already accredited a levy on such companies in 2020.
On Friday, Doug Herman, a spokesperson for Bass’ reelection marketing campaign, stated she has “not taken a place” on the state or metropolis wealth tax proposals. However at her marketing campaign launch final month, Bass framed the mayoral race as “a selection between working folks and the billionaire class who deal with public workplace as their subsequent self-importance undertaking.”
Jeremy Padawer, a toy business government and animated TV producer who misplaced his dwelling within the Palisades hearth, stated the mayor’s framing of the race as a battle towards billionaires feels contrived, particularly given the extraordinary criticism of her dealing with of the hearth.
Energy is as related as cash, and Bass is “probably the most highly effective particular person within the room,” stated Padawer, who organized the “They Let Us Burn” rally on the one-year anniversary of the hearth.
“I do know a number of billionaires,” Padawer stated. “And I feel that billionaires will be inclined to do a number of good, however in addition they have the propensity to do a number of unhealthy.”
Instances workers author Queenie Wong contributed to this report.
