California is trying to shame rich people into bailing out the state’s failing budget, and the result will be a worse California where everyday workers are forced to pay even more than they pay now.
California is workshopping a “one-time” 5% wealth tax on people with a net worth over $1 billion, which is about 200 people in California. It would be a retroactive tax, as it would have to be approved by voters through a ballot proposition in November 2026, but would apply to anyone who was a California resident as of Jan. 1, 2026. It is also a tax on worldwide assets, meaning California is going to try and lift money that was not earned in California from people who do not live in California, if it were to go into effect.
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A “one-time” (sure) tax of this nature is better described as wealth confiscation, and it understandably has multiple wealthy Californians looking for the exits, including Google co-founder Larry Page and PayPal co-founder Peter Thiel. Democrats are resorting to emotionally manipulating them and voters in response to this obvious impulse to move, with Rep. Ro Khanna (D-CA) saying, “Peter Thiel is leaving California if we pass a 1% tax on billionaires for 5 years to pay for healthcare for the working class facing steep Medicaid cuts.”
The problem is that everyone knows this will not be a temporary measure, nor will it be limited to just “billionaires.” California’s current budget is over $320 billion, and yet Khanna and other Democrats say they need even more money to pay for healthcare or child care. California is looking at budget deficits of around $17 billion next year and $35 billion the year after because Democrats continue to spend money they don’t have and impose taxes to try to fund their never-ending spending spree. This is exactly what happened when California Democrats said they did not have money to pay for road maintenance (again, the state has a budget of over $320 billion per year) and had to jack up the gas tax.
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The most predictable outcome will be the result. The billionaires will leave California, taking jobs and taxable income with them. The legality of California retroactively taxing its residents will not hold up in court. Democrats will need to find another source to tax to fund their bloated state budget, and that will, of course, be the tens of millions of everyday Californians that the state is already taxing into the dirt.
California is going to chase even more businesses and people out of its state because Democrats refuse to practice any sort of financial responsibility. You can rant and rave about the rich “paying their fair share” all you want, but the irresponsible, multibillion-dollar California government is making things worse for everyone but the politicians and bureaucrats that run it.