California billionaires could face one-time tax to fund healthcare emergency
UC Berkeley sees debate on Californias proposed billionaires tax
One hot button issue that may not be vote on until the November midterm elections is the proposed California billionaires tax. Under the proposal, a 5% tax would be imposed on the states richest residents.
BERKELEY, Calif. - A heated debate at UC Berkeley Tuesday evening saw two economic titans clash over a proposed "billionaire tax" that could appear on the California ballot this November. The initiative aims to raise $100 billion to address a financial healthcare emergency in the state following federal cuts to healthcare payments.
What we know:
If passed by voters, the 2026 California Billionaire Tax would impose a one-time 5% emergency tax on the net worth of individuals holding more than $1 billion in assets. Under the proposal, individuals would be taxed $50 million for every $1 billion in assets held globally.
Professor Emmanuel Saez, a UC Berkeley economist who helped author the initiative, argued the measure is a necessary response to budget shortfalls.
"You have a $2 trillion tax base. Take 5% of that and you have 100 billion," Saez said. "That's a really big number that corresponds more or less to the Medicaid cuts."
However, Dr. Arthur Laffer, known as the "father of supply-side economics," warned the tax could backfire. Laffer argued that the measure might drive the state's wealthiest residents—and their businesses—to other states.
"There are a lot of ways of doing it rather than this way," Laffer said. "This is possibly the worst possible way I can imagine trying to get money from the rich. You can't tax a state into prosperity. It's just as simple as that."
Laffer instead advocated for simplifying the tax code by eliminating deductions, taxing inheritances, and removing tax-exempt statuses for certain organizations.
While Laffer raised concerns about billionaires fleeing the state, Saez noted the initiative is designed to apply to assets held as of Jan. 1, 2026, suggesting it is already "too late" for potential taxpayers to move to avoid the bill.
The financial impact on California's wealthiest would be historic. According to Forbes figures, Google founder Larry Page could face a $12.5 billion tax bill, while Meta founder Mark Zuckerberg would owe roughly $11.1 billion. Even Tom Steyer, a two-time billionaire, would be expected to pay $100 million.
What's next:
The initiative's future rests with the voters this November, pending the verification of enough signatures by organizers.
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Proposed California billionaire tax sparks sharp reaction among elite, politicians
A proposed ballot measure to tax California’s billionaires is drawing sharp reactions. Supporters call it a lifeline for health care programs and critics warn it could drive wealthy residents out of the state and discourage entrepreneurship.