California’s Golden Goose Is Already Flying the Coop

The state’s tax base is being hollowed out even before the ‘wealth tax’ qualifies for the ballot

By Hank Adler. He is a professor of accounting at Chapman University. Excerpts:

[they would] "would impose a 5% one-time tax on the wealth of individuals who were California residents on Jan. 1, 2026, and whose net worth exceeds $1 billion"

"the top 1% of taxpayers generate roughly 40% of the state’s personal income-tax revenue"

"Although California doesn’t currently tax wealth directly, it heavily taxes the income generated by wealth—particularly capital gains"

"Earlier this decade, Larry Ellison and Elon Musk—then among California’s wealthiest residents—relocated to Hawaii and Texas respectively. Apparently in reaction to the proposed billionaires tax, Sergey Brin and Larry Page late last year became Florida residents, and Mark Zuckerberg reportedly established a residence there early this year. Together these five men once accounted for roughly $1.7 trillion of the more than $1.8 trillion net worth held by California’s six richest residents earlier in the decade."

"The ballot measure would amend the state constitution to lift California’s limit on taxes on wealth, opening the door to future levies"

"Supporters suggested the tax could raise as much as $100 billion, which the bill pledges to fund education, food assistance and healthcare. The Hoover Institution estimated a much lower figure, about $40 billion, largely because of taxpayer mobility and the likelihood that wealthy residents have and will relocate regardless of whether such a tax is imposed. The facts so far support Hoover’s estimate much more than the tax’s supporters’ figure."