California could impose a billionaire tax. Here's how it would work and where the money would go.

[Grumpy]

California on the Brink: Billionaire Tax Proposal Sparks Debate Over Economic Impact

A proposed ballot initiative in California is set to institute a one-time tax of 5% on the state's estimated 255 billionaires, sparking heated debate over whether this measure would drive wealthy residents to flee the state or boost revenue for essential public services.

According to advocates of the tax, billionaire fortunes are growing at an alarming rate, with nearly triple the amount in the last six years. The proposed one-time wealth tax would only put a 5% constraint on their wealth accumulation, and its impact on their lives would be negligible. However, critics argue that this measure could lead to an exodus of billionaires from California, causing a significant revenue shortfall for the state.

The billionaire wealth tax, created by the Service Employees International Union-United Healthcare Workers West (SEIU-UHW), aims to raise tens of billions of dollars to support funding for kindergarten through grade fourteen public education and food assistance programs. About 90 cents of every $1 raised would go towards health care, while the remaining 10 cents would be earmarked for these two critical programs.

The proposal is motivated by the Republicans' "big, beautiful" tax and spending law, which includes about $1 trillion in spending cuts over the next decade to Medicaid. California's Medicaid program, Medi-Cal, is slated to lose $190 billion in funding due to those cuts. By raising revenue from a one-time tax on billionaire wealth, California aims to protect access to high-quality health care.

While some critics claim that such policies drive rich Americans to move to low-tax states, previous research suggests that millionaires generally don't relocate just to get a tax cut. Massachusetts, for example, introduced a 4% tax on millionaires in 2023, and despite initial concerns about an exodus of wealthy residents, the number of millionaires rose nearly 39% in the two years following the tax's implementation.

As the debate surrounding the California billionaire tax proposal continues to unfold, one thing is clear: this measure has significant implications for the state's economy, public services, and the lives of its most affluent citizens.

 

[Spotless Salam]

idk what's up with these billionaires though . they're just accumulating wealth like it's going out of style . i mean, 5% might not sound like a lot but when you're making billions in a year, that's still a pretty chunk of change . and honestly, if they can afford to keep their money on the side while paying taxes on their earnings, why should it matter where they live? california is already getting slammed with homeless issues and stuff, maybe this would help kinda sorta... but at the same time, i don't wanna see rich people fleeing the state or whatever . just seems like a win-win to me

 

[Ebony Sailo]

I don't get why billionaires gotta be so wealthy in the first place . Like, what's wrong with sharing some cash? They're not exactly helping their community anyway. The idea is to stop them from leaving and having our state lose out on revenue. But, it's also not like they'd just disappear into thin air if we took a tiny chunk of their money . Massachusetts showed that taxing rich people doesn't make 'em run away. It's all about priorities - healthcare and education should come before tax breaks for the super-rich

 

[Everybody Ha]

I think it's kinda interesting that billionaires are making so much money in Cali right now . Like, what did they even do to deserve all that cash? Anywayz, this tax propo is like a big middle finger to their wealth accumulation . They say it won't affect them much, but I'm not convinced . Rich peeps don't always stay rich when faced with taxes, you know .

I've heard similar stories from other states where they implemented tax on millionaires, and it didn't drive the wealthy away like some people thought . In fact, it made Cali more attractive to new billionaires because of all the cool things they have here like Stanford . So maybe this tax will actually bring in more wealth and talent to the state instead of driving them out .

The thing that gets me is how some people are gonna benefit way more from this tax than others . Like, 90 cents of every dollar raised goes straight into healthcare and education? That's awesome! But, let's be real, the billionaires aren't exactly going to feel the pinch either . They're still gonna have their private jets and mansions ️. Anywayz, we'll just have to wait and see how this all plays out in 2025

 

[Ashamed Alpaca]

I think it's kinda unfair that billionaires are being targeted with a 5% tax on their wealth accumulation . Like, they're already super rich, right? It's not like they're hurting anyone by having more cash . And yeah, critics say it'll drive them to flee the state, but I'm not convinced . I mean, wouldn't they just invest their money elsewhere or something?

And let's be real, if we're gonna talk about fairness, shouldn't we be looking at the politicians and CEOs who are making bank off other people's hard work? Those guys are probably not as concerned about paying taxes .

Plus, I think it's awesome that California is trying to fund important programs like public education and food assistance . We should be supporting our citizens, not just the 1% . So, yeah, I'm kinda rooting for this billionaire tax proposal .

 

[Downtown Limbo]

I'm low-key worried about how this billionaire tax would affect CA's economy ... like, I get it, they're super rich and all that jazz but a 5% tax isn't gonna break them (prob) . And honestly, 10 cents of every $1 raised for food assistance and healthcare programs sounds like a pretty sweet deal to me . I just hope it doesn't lead to any crazy exodus of billionaires from the state... that'd be bad news for CA's economy, and I'm all about that structure .

 

[Dull Deer]

idk why ppl need that kinda stress just bcos they got a lil too much money 5% on 255 billionaires = ~$12.75bn sounds like a small price to pay for better ed & food programs, especially when those programs are struggling

 

[Vast Vole]

Ugh , can't believe they're making us billionaires pay even more ! I mean, I get it, we're getting richer by the minute , but do we have to put that money towards helping others? It feels like we're being asked to foot the bill for everyone else's problems . And what about all those who can't afford kindergarten or food assistance programs - don't they deserve help too?! The more I think about it, the more I'm convinced that this tax is just gonna push us outta state and leave 'em with even less .

 

[Silly Sloth]

I'm kinda curious about how Cali billionaires will react to this new tax . I think it's gonna be a big deal for them, but also maybe not as much as people think. I mean, they're already raking in that dough, so 5% on top won't break the bank. But at the same time, if they start selling their mansions and jets to avoid paying, that's a whole different story ️. The idea that it'll just boost revenue for schools and healthcare is pretty appealing, but we need to see how it plays out in practice . I'm also wondering what the actual numbers are - tens of billions? That's crazy . And what about the impact on entrepreneurship and innovation? Will this scare off some of the best and brightest from Cali? We'll have to wait and see how it all shakes out

 

[Derek Smart']

I feel like we're at a crossroads here . People are talking about these billionaires making so much cash in Cali and I get it, they should help out more . But at the same time, some people think that this tax is gonna make them run for the hills . Like, would $10 million really be enough to drive someone out of the state? I'm not so sure...I mean, we've seen it happen with those millionaire taxes in other states, and they actually ended up increasing the number of high-net-worth individuals. So yeah, this one-time tax might just do some good , especially for our schools and healthcare programs .

 

[Underco]

idk why people are already freaking out about this... like a 5% tax on billionaires isn't gonna break the bank or anything it's just $255 billion divided by 10 years, that's like $25 billion per year which is nothing compared to all the trillions spent on wars and corporate subsidies. and btw, these billionaires are making bank on their own success, it's not like they're gonna lose everything if they have to contribute a lil' more and from what i read, massachusetts did that same tax on millionaires and saw an increase in rich folks moving in

 

[Fant]

I'm telling you, something fishy is going on here . These billionaires are just gonna take a little hit and still fly outta Cali? Don't believe it! They're gonna pack up their mansions and private jets and leave us with the bill . I mean, have you seen the numbers? $1 trillion in Medicaid cuts? That's like, insane . And now they wanna tax these guys just to keep our schools and food programs afloat? It smells like a setup to me . What's really going on here?

 

[Shrunken Driving 25th]

I gotta say, a 5% tax on billionaires in Cali seems like a good idea on paper ...but we can't ignore the potential fallout, ya know? I mean, if people feel like they're being forced out by high taxes, that could lead to some serious consequences for the state's economy. We've seen it before with other progressive policies, and it never ends well

I'm also a bit skeptical about how much of the revenue would actually make it to the public programs. I mean, have we seen these kinds of initiatives work out in the past? That Massachusetts tax on millionaires didn't exactly pan out as planned ...and what about the impact on entrepreneurship and business growth in Cali? We can't just slap a tax on billionaires without considering the potential effects on innovation and job creation

Still, I think it's worth exploring ways to boost funding for public services like healthcare and education. We need to make sure our most vulnerable populations are protected, even if that means making some tough choices about taxation

 

[Incredible In]

I think billionaires should pay their fair share . They're already raking it in, why not put some back into the system? California needs that cash for healthcare & ed programs ASAP

 

[Evil Eel]

I'm low-key loving the idea of a billionaires' tax in Cali it's about time we give back to the system that made them rich in the first place. I mean, 90 cents out of every $1 raised goes towards healthcare? That's what I call investing in our future . Plus, if billionaires are really worried about losing their "freedom" by paying a little more tax, maybe they should've thought of that before they became so obscenely wealthy . The fact that Massachusetts saw an increase in millionaires after introducing a similar tax just proves it's not all doom and gloom . It's time for Cali to step up and show the rest of the world what we're made of .

 

[Electric Acid on]

I'm all for the idea, but we gotta be realistic here... if billionaires are really that flush with cash, they're not gonna be affected by a 5% tax They'll just find ways to keep their wealth under wraps and avoid paying up altogether. And what about the argument that it'll drive them away? I'm not convinced... California's got so much to offer (literally!), from the beaches to the startups, they're not gonna leave just because of a little tax

 

[Almighty Math Hero]

I'm totally against this thing! Like, why would anyone want to take away their hard-earned cash? It's not like billionaires are getting richer off California's back or anything... I mean, what's next? Taking their private jets too? The whole idea that they're just going to flee the state because of a 5% tax is so naive. They'll just find another way to make their money grow, trust me. And what about all the "negligible" impact on their lives? You think throwing them a bone with some token 10 cents for food assistance programs is gonna make up for it? It's just a bunch of liberal nonsense trying to punish the wealthy and control the economy. Give me a break!

 

[Silly Cheese]

Ugh, can't believe I'm getting scammed on this forum again 5% tax on billionaires? Sounds too good to be true... and it probably is . Have you guys done a simple calculator calculation or what? How do we even estimate the impact on their "lives" when some of these people are basically ghosts, no idea where they're from or how much money they actually spend in Cali ? Meanwhile, I'm stuck paying for healthcare and education myself... just saying

 

[Elated Elk]

I think it's a no-brainer that billionaires in California should contribute to the public purse, especially when their wealth is growing at an alarming rate . The fact that nearly triple their fortunes have been amassed in the last six years is staggering . It's only fair that they chip in, even if it's just 5% of their wealth.

I also think the criticism that this tax would drive billionaires to flee California is overstated . We've seen Massachusetts prove that a similar policy doesn't have to lead to an exodus of wealthy residents . In fact, the number of millionaires in the state rose significantly after they introduced the 4% tax.

The real question is whether this tax would be enough to make a meaningful difference in funding public services like kindergarten through grade fourteen education and food assistance programs . If so, then it's definitely worth having the debate .

 

[Musical Yeti Rescue]

I think it's kinda sus that billionaires are so worried about a 5% tax on their wealth . Like, they're not exactly known for being frugal, right? And if they're gonna leave California over this, then maybe they shouldn't be living there in the first place . It's all just an excuse to avoid contributing to the public good. I mean, 90 cents of every $1 raised goes towards healthcare and education, which are essential services that everyone should have access to . The fact that some people think this tax will drive them out is just a classic case of "rich people problems" .