‘Billionaire Tax’ Appears Defeated in California, But Soak-the-Rich Approach Gains Traction Elsewhere
Here’s a plain-English paraphrase of the article:
Headline: A proposed “billionaire” wealth tax in California was defeated, though similar anti-wealth arguments are finding support in other states.
Summary:
– Recent state ballot results suggest voters’ choices on taxes may have been driven more by issues like gas prices and opposition to Trump than by widespread enthusiasm for higher taxes on the wealthy.
– California’s centerpiece measure woudl have levied a supposedly one-time 5% tax on individuals and trusts holding more than $1 billion. Prominent economists Gabriel zucman and Emmanuel Saez and SEIU-UHW leadership backed it, while California tech billionaires spent heavily to block it.
– Zucman acknowledged the loss in California but said he would pursue a national version of the tax, noting lawmakers such as Rep. Ro Khanna and Sen. Bernie Sanders have proposed similar federal legislation. He also conceded a federal wealth tax could face meaningful constitutional challenges.
– With about 60% of votes tallied, California’s Proposition 40 was losing (about 55.6% against, 44.4% in favor). A related measure, Proposition 42, which would amend the state constitution to bar new personal property taxes, was also winning by a similar margin. The results indicate voters may resent tech billionaires but are also concerned higher taxes could push businesses and wealthy residents out of the state, which already has a top income tax of 13.3%.
– Critics and opponents argued voters didn’t believe the tax would be temporary and feared it would prompt wealthy Californians to leave. Some commentators celebrated the defeat; others later softened their reactions.
– Elsewhere,results were mixed: washington State voters appeared to reject overturning their millionaire tax (meaning the tax remains),with about 58.1% opposing repeal. The state legislature and governor had already approved a 9.9% tax on income and long-term capital gains above $1 million to take effect in 2028.
– In Colorado, voters were narrowly poised to replace the flat 4.4% income tax with a graduated system that would top out at 8.4% for incomes above $1 million.
– Other ballot items targeted property taxes. Florida voters approved a $250,000 homestead exemption for non-school property taxes. Analysts noted that, voter attitudes about specific tax policies haven’t shifted dramatically in recent years, despite broader partisan changes.
– The article closes by noting a trend of wealthy individuals relocating from high-tax states (New York, Illinois, California, Massachusetts) to lower-tax states (Texas, Nevada, Florida).
Washington State fails to repeal its millionaire tax
Election results from a series of state ballot initiatives on tax issues suggest that the wave of Democratic victories may be more about gas prices and anti-Trump sentiment than any overwhelming voter enthusiasm for “tax the rich” policies.
The center-ring tax ballot initiative of the election was a California measure that would have imposed a “one time”—yeah, right—5 percent tax on individuals and trusts with more than $1 billion in assets. Championed by French U.C. Berkeley economists Gabriel Zucman and Emmanuel Saez and by the president of SEIU-United Healthcare Workers West, Dave Regan, it was opposed by California-based tech billionaires, who spent hundreds of millions to defeat it.
Zucman conceded on Wednesday that the initiative had been defeated and said he would try to get it done nationally by an act of Congress.
“It’s now one of the best environments to pass a billionaire tax in Washington in decades,” he said in a post on X, adding that Rep. Ro Khanna of California and Senator Bernie Sanders of Vermont had already introduced a national version of the tax.
“Trump could veto it, but even so it could pave the way for a 2028 billionaire tax if the Democrats win back the White House. … The battle between democracy and oligarchy is just beginning,” Zucman said. A federal tax of that sort might face significant constitutional obstacles, however.
The California initiative, Proposition 40, was opposed by 55.6 percent of voters and favored by 44.4 percent, with 60 percent of votes counted in the Golden State’s glacially paced reporting system. A related measure, Proposition 42, that would amend the state constitution to ban such new taxes, was winning by a similar margin. It suggested that whatever resentment California voters harbor toward tech billionaires, they are also wary of any measures that would send more business and talent fleeing the state for lower-tax jurisdictions. The state already has an income tax with a top marginal rate of 13.3 percent.
“Not only was california’s wealth tax rejected by voters, the *concept* of the wealth tax was *banned* by voters. eat shit, communists,” commented Pirate Wires editor-in-chief Mike Solana, in a post that he subsequently walked back as possibly premature.
“Voters were skeptical of claims it would be temporary and they were rightly worried this would drive wealthy Californians out of state,” the Committee to Unleash Prosperity, a pro-growth research and advocacy group, wrote in its newsletter, in an item headlined, “Even in a Blue Wave Election, Voters Still Hate Taxes.”
Democrats have tried to target the taxes at “the rich,” attempting to capitalize on class resentments or envy and aiming to convince voters that the taxes will be paid by “the rich,” not by the majority of people casting the votes. That approach has been successful at the ballot box, if not in state economies, in some places. In Washington State, a measure to repeal the millionaire tax was trailing, with 58.1 percent opposed to the repeal and 41.9 percent in favor, with 60 percent of votes in, according to the New York Times. The state legislature and Democratic governor, Bob Ferguson, enacted a 9.9 percent tax on income and long-term capital gains above $1 million, which is scheduled to take effect January 1, 2028.
In Colorado, a ballot measure, Amendment 87, to amend the state constitution and replace the current 4.4 percent flat tax with a top rate of 8.4 percent on those earning $1 million or more, was leading narrowly, 50.49 percent to 49.51 percent, with 76 percent of the votes counted.
Ballot measures in other states focused on property taxes. Florida voters approved what the Tax Foundation described as “a $250,000 homestead exemption for non-school property taxes.” The Tax Foundation’s Jared Walczak summed it up in a blog post by observing, “The results on tax-related ballot measures lack the strong narrative of congressional results, but perhaps that is itself the takeaway: voters’ views on specific tax policies don’t seem to have changed much in recent years, even against a backdrop of significant partisan churn.”
Recent years have seen a series of high-profile departures by wealthy individuals from higher-tax states such as New York, Illinois, California, and Massachusetts to lower-tax states such as Texas, Nevada, and Florida.
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