Aakash Gupta@aakashgupta
This is one of the dumbest tax proposals in California's history, and the math is so bad it embarrasses the people who wrote it.
Start with the headline. SEIU promises $100B in revenue. California spends $161B a year on Medi-Cal alone. The entire windfall, if collected at face value, funds 7 months of one program. Then it's gone forever, and the structural deficit they claim to fix returns the day the check clears.
Now the math gets uglier. The Hoover Institution estimates the permanent income tax loss from departing residents makes the net fiscal impact NEGATIVE by $25 billion. Read that twice. California sets fire to political capital, court costs, and capital flight to NET LOSE $25B. They're proposing to torch recurring revenue to fund 7 months of a program they've already underfunded for a decade.
The exodus already happened. $700B in net worth wired out of California before January 1, 2026. Larry Page, Sergey Brin, Travis Kalanick gone. The remaining 208 billionaires aren't tech founders sitting on liquid stock. They're real estate, agriculture, entertainment, the people whose wealth is physically bolted to California. Mobile capital fled. Trapped capital pays.
Read what San José mayor Matt Mahan, a Democrat running for governor, said about this on KQED: "It will lead to middle-class people having to pay higher taxes in the long run." A Democratic gubernatorial candidate openly admitting the wealth tax is a regressive transfer to the middle class. That's the part proponents won't put on the signs.
The legal exposure is worse. The proposal taxes wealth held as of January 1, 2026, retroactively, after voter approval in November 2026. Retroactive wealth taxation has never survived constitutional challenge in any US state. Washington's capital gains tax survived only because the state Supreme Court reclassified it as an excise tax. The poison-pill measure on the same November ballot bans retroactive taxation by constitutional amendment, funded by $80M from people who can afford the lawyers.
Every wealthy democracy that tried this killed it. France's wealth tax drove out an estimated 42,000 millionaires and €100B in capital before they repealed it in 2017. Italy, Sweden, Germany, Denmark, Austria, Finland, Iceland all tried wealth taxes. All repealed. California is about to vote on the experiment every comparable economy already ran and lost.
The signatures are real. The math is fake. The capital is already gone.