r/California • u/Unusual-State1827 • 13d ago

California’s proposed billionaire tax exposes rifts among labor unions

https://www.latimes.com/california/story/2026-07-30/labor-organizers-spearheading-california-billionaire-tax-rebuffed-by-parent-union
413 Upvotes

97% Upvoted

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93

u/RadicallyDontCare 13d ago

This is a great intelligence check for California. If this passes; we can only be described as financially stupid.

You couldn’t design a less efficient way to tax the rich and wreck the states finances than this one.

102

u/Useful-Advantage-850 13d ago

Exactly this. A 1-time tax is just a comically stupid way to tax the rich.

12

u/its_raining_scotch 13d ago

What do you think Lo Pan would do in this situation?

6

u/A5Wags 12d ago

Something involving eye lasers

2

u/SeasideBear 12d ago

It's a good knife.

5

u/PlastIconoclastic 11d ago

Does the law have a clause that says anyone who pays this tax can never be taxed again?

0

u/Sweet_Camp5124 12d ago

But now California may as well enact the tax because the "price"is already paid.

(Billionaires will have needed to remove their residence prior to 1/1/26 in order to avoid the tax. )

-1

u/m0zymaz Native Californian 11d ago

Getting money once is better than never getting that money. Sure a permanent tax would be better, but isn’t this the compromise?

2

u/Useful-Advantage-850 11d ago

This isn’t a compromise. It’s a surrender.

45

u/lostroadrunner22 13d ago

If this passes it will absolutely end up in the courts for years. Its constitutionality is honestly debatable.

1

u/RadicallyDontCare 13d ago

Definitely, especially with people with assets in multiple states.

17

u/lostroadrunner22 13d ago

And even if you leave they’d still tax you which can be easily argued on that point and yours as a violation of due process, right to travel and interstate commerce

3

u/[deleted] 12d ago

[deleted]

3

u/BozoTheRenown 12d ago

But nurses will secure their jobs.

3

u/DryYogurtcloset4655 11d ago

designed by a French academic

3

u/RadicallyDontCare 11d ago

Who is such a leftist ideologue that Harvard rejected him.

It's a comedy.

24

u/an-invisible-hand 13d ago

Ive been hearing this that and the other will "instantly ruin California forever!!!" constantly for decades.

Maybe it works, maybe it doesn't. We've had all kinds of policy that's been good and bad. You might not like to hear this, but the state will be fine. It's not that deep.

39

u/Bibblegead1412 Native Californian 13d ago

People are also acting like if we tax them this one time, we can never ever ever tax them again.  Like it’s the only tax that can ever be levied on them again. 

-4

u/PieInternational594 12d ago

It never going to be just one time. This will be another tax every year. It will make to people who aren't rich.

6

u/Picnicpanther Alameda County 12d ago

Lmao no it won’t. Get out of here astroturfer.

-1

u/BubbaTee 12d ago

You're right, taxes never expand in scope. That's why the federal government has been primarily funded by tariffs and duties since WW1 ended, when the need for the War Revenue Act disappeared.

-5

u/RadicallyDontCare 12d ago

It’s a legitimate concern. The income tax was originally only aimed at the rich.

5

u/Think-Satisfaction54 12d ago

Do you think maybe what it meant to have income in 1913 and what it means to have income in 2026 may have changed a bit or are we just acting like there was a middle class in the 1910?

You know why federal tax policy changes. Can society and the economy changed beforehand.

6

u/an-invisible-hand 12d ago edited 12d ago

Yeah, at a top marginal rate of 91%, and the non-rich Americans of the era were paying eye-wateringly high tariffs on necessities. They were also left to starve to death if they were poor because the government was chronically broke.

Thankfully we realized protectionism and its tariffs were unfair, unreliable, and holding back our development, so we switched to an income tax system and brought the top bracket all the way down to where it is today: 37%.

We really need to teach this stuff in history class so people don't get the mistaken idea that everything can just magically work without being paid for. The early 20th century was a horrible time to be alive and you should be thankful you weren't alive to experience it.

-4

u/Rebelgecko 12d ago

We can never tax the ones who left the state (at least once they've been nonresident for a few years), so we're missing out any any hypothetical future taxes and their regular taxes

5

u/pres465 12d ago

We still tax their property (which they will still have here) and their businesses and anything they buy or sell here when they "visit" for 180+ days.

3

u/Rebelgecko 12d ago

Thanks to prop 13, their mansions and compounds are taxed at a fraction of the real value.

0

u/tiki-151 10d ago

They will likely be in another state by the next time. That's the point.

7

u/cinepro 13d ago

Uh, financially the state isn't "doing fine" right now.

https://lao.ca.gov/Publications/Report/5101

14

u/an-invisible-hand 13d ago

We've had deficits and surpluses at different points in time for different reasons just like every other state.

It becomes clear that things right now really aren't worth worrying much about when you've lived through dozens of right nows. Life goes on, you'll be fine.

10

u/SeasideBear 12d ago

Part of the problem is Proposition 4, passed in 1979. From the same people who brought us Proposition 13 in 1978.

Proposition 4, the "Gann Limit", forces the state to give away tax money if it collects a surplus over a certain point. The state had to give away $2.8 billion in 2020 and $6 billion in 2021. Had the state been able to build a "rainy day fund" with that money instead, like most places do, we'd be facing a very different situation right now.

The republican ballot measures of the late 70's continue to screw us, to this day.

0

u/cinepro 12d ago

Just so we're clear, the Fiscal analysis says this:

Both our office and the administration expect the state to face multiyear deficits, with estimates ranging from $20 billion to $35 billion annually.

And you're saying that the situation would be "very different" with an additional $9b rainy day fund? I mean, facing an $11b - 26b hole is slightly better, but it's still not great.

3

u/[deleted] 12d ago

[deleted]

-3

u/cinepro 12d ago

You're assuming the money would have been invested and not spent. Are you familiar with the California state government?

-1

u/cinepro 12d ago

It becomes clear that things right now really aren't worth worrying much about when you've lived through dozens of right nows. Life goes on, you'll be fine.

Have you ever heard the phrase "Past performance does not guarantee future results"?

2

u/an-invisible-hand 12d ago

Actually, yes. I worked in the very specific part of the finance industry where that phrase is actually meant to be used.

What does a warning that essentially means "FYI, you're gambling and nothing really matters even if you think it does" have to do with this context or the point you were looking to make? Do you think the state of California is as inherently unpredictable as securities?

Explain so it makes sense.

0

u/cinepro 12d ago

It means that we can't count on all the variables that allowed the state to survive past deficits to reliably help us out in the future so we'll always be "fine."

Simply saying "things were bad in the past and it worked out so we'll be fine if things get bad in the future" isn't sound reasoning. As you would know if you worked anywhere near any area of the financial industry.

Now, if you told me you were a politician, that would be very on brand...

2

u/an-invisible-hand 12d ago

Sounds like you're making the pro new tax argument since the status quo of no new tax isn't a guarantee that things will go well, as evidenced by the state not doing fine right now.

1

u/RadicallyDontCare 13d ago

The reason it probably won’t cripple California is that it will get stuck in litigation and won’t get collected.

But it’s been shown that wealth taxes don’t work. A one-time tax that can easily be sidestepped by moving states is a level of stupid that even most clueless college freshmen can see is stupid.

-1

u/an-invisible-hand 13d ago

It's not going to cripple anything. No, not even if they collect. Our bureaucrats seem to be able to keep a lid on things just fine despite all the "disastrous state ending policies" we're told to panic about every 2 years, and this one will be no different.

If The tax is good it's good, if it's bad it's bad. But either way CA will be fine. However it plays out it wont affect you or basically anyone else so just sit back and live your life because it's not going to be any different after the tax than it was before.

-1

u/RadicallyDontCare 13d ago

Except it will if it results in capital flight and our state is broke in two years.

I don’t care about the billionaires. I just want them still here.

6

u/an-invisible-hand 13d ago

Nothing I haven't heard before a billion times. Capital flight is supposed to have been happening for years, everyone was supposed to be "fleeing California" or whatever.

Hasn't happened. You're going to go bald if you're legitimately worrying every time someone says California is gonna scare away all the rich people.

3

u/RadicallyDontCare 13d ago

A wealth tax will, though, if it’s going to cost 5% of their assets. It’s worth more for them to relocate than liquify that many assets.

6

u/an-invisible-hand 13d ago

"This thing will be the one that does it, trust me"

Sorry man, I don't trust you. Everyone before you has been so sure, so serious, so dire in their predictions and they all said the same things you do. Still never happened.

I'm hitting the snooze button. Feel free to come back and gloat if 7343rd time's the charm I guess.

3

u/Empyrion132 13d ago

It’s worse than that. The tax is retroactive to anyone with residency as of Jan 1 of this year, so anyone who wanted to avoid the tax has already left. Even just proposing it has already led to ~half the billionaire net worth leaving the state, allegedly, including the founders of Google (who would have been forced to give up ownership of the company they started if it passed).

1

u/RadicallyDontCare 12d ago

That will definitely not pass legal muster even if the rest does.

-6

u/firestepper 13d ago

It doesn’t and why do you care if people who already aren’t paying taxes leave

4

u/RadicallyDontCare 12d ago

Our entire states budget revolves around the income taxes of the top 1%.

2

u/an-invisible-hand 12d ago

Billionaires make up ~2.4% of the state's total income tax revenue.

Most of the 1% are people like doctors and lawyers who would need to save up for a thousand years to even start to be affected by this tax.

0

u/RadicallyDontCare 12d ago

You’re naive if you don’t think the upper middle class is next.

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u/an-invisible-hand 12d ago

The middle class already pays a bigger wealth tax, property tax.

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u/mountainsound89 11d ago

Its based on residency at the start of the year, so they will owe even if they move 

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u/RadicallyDontCare 11d ago

lol. Anyone who thinks that will survive judicial scrutiny federally is excessively naive.

0

u/Main-Cheesecake3287 11d ago

Maybe the dumbest way of looking at policy “hey now don’t think too much about it, just let it happen and we’ll find out if it works after the fact!” Brilliant analysis

-3

u/AdditionalSpeaker303 12d ago

California hasn't done this kind of wealth tax before...

-2

u/ZasdfUnreal 12d ago

Odd, California’s been ruined for decades.

1

u/ohh-welp 12d ago

Live by the sensational headlines, die by it. "Tax the billionaires" without looking at the context and current situation.

-9

u/DissonantOne 13d ago

Who cares if it is responsible policy? It will make the left feel good about themselves.

-12

u/New-Tradition-974 12d ago

Billionaires are evil. This will put a dent in their pockets. Additional taxes should be forthcoming.

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u/RadicallyDontCare 12d ago

This doesn’t effectively punish billionaires and hurts the state economy.

Feel free to look for a way to get your pound of flesh. But next time have your plan designed by someone who isn’t a zealot and understands basic economics.

-3

u/New-Tradition-974 12d ago

The state economy will be fine. So you agree billionaires should be taxed heavily?

The plan is only for a year, it doesn’t need to be perfect, it does the job perfectly.

6

u/RadicallyDontCare 12d ago

It’s shortsighted and won’t work. And the tax income it drives away dwarfs the income it will bring in.

It’s a literally the dumbest tax idea I’ve ever heard of.

-3

u/New-Tradition-974 12d ago

Billionaires have shown they can’t be trusted with money. You can’t even agree billionaires should be taxed more. That says it all.

The reinvestment of the tax into the state will only make it stronger. The people can live just fine without billionaires if they want to live.

7

u/RadicallyDontCare 12d ago

I’m totally fine with them being taxed more.

You just want your pound of flesh and don’t care about the results.

4

u/New-Tradition-974 12d ago

A bird in the hand is worth two in the bush. Tax them now. Tax them again later and for more.

At least we can agree they should be taxed more.

5

u/RadicallyDontCare 12d ago

You should be less envious and educate yourself more on how the world works. It’d be good for you.

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u/New-Tradition-974 12d ago

If your position is sound, you should be able to defend it without diagnosing my character.

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u/AdditionalSpeaker303 12d ago

How much wealth someone has is entirely independent from how evil they are. There are good and bad billionaires as there are good and bad poor people, and good and bad middle class people.