California has billionaires on the mind.
Final week union activists, hoisting big cutouts of cash baggage and a cigar-smoking boss, introduced a proposal to lift Los Angeles metropolis taxes on firms with “overpaid” chief executives.
They rallied in entrance of a logo of the uber wealthy: the futuristic, steel-covered Tesla Diner owned by Elon Musk, the world’s richest man.
In the meantime, a “billionaire tax” proposal prompted a few of the wealthiest Californians to think about fleeing the state, amid arguments that they might take their tax income — and the businesses they run — with them, hurting the atypical residents the proposal is designed to assist.
The deal with taxing the richest of the wealthy comes amid a rising affordability disaster in California, house to the nation’s most costly housing market and highest revenue tax.
Greater than 200 billionaires reside in California, greater than every other state, based on a gaggle of regulation and economics professors at UC Berkeley, UC Davis and the College of Missouri who helped draft the statewide billionaire tax proposal, which proponents are hoping to put on the November poll.
And they’re getting richer. The collective wealth of the state’s billionaires surged from $300 billion in 2011 to $2.2 trillion in October 2025, based on a December report by these professors. In Los Angeles, the place the median sale worth of $1 million places house possession out of attain for a lot of residents, outstanding billionaires embody David Geffen, Steven Spielberg and Magic Johnson.
One conspicuous billionaire is particularly unpopular in California: President Trump, who, regardless of campaigning on bringing down the price of residing, not too long ago known as the phrase “affordability” a “con job” as he redecorated the White Home in gold.
“In a deep blue state like California that has voted in opposition to Donald Trump by such massive numbers within the final three elections, voters are much more predisposed to be suspicious of billionaires, as a result of he’s now the particular person with whom they affiliate the standing,” mentioned Dan Schnur, a politics professor at USC, UC Berkeley and Pepperdine.
The state and native tax-the-billionaires proposals, he mentioned, are “about retribution,” very similar to final 12 months’s Proposition 50, which briefly redraws the state’s congressional districts to favor Democrats as a counterweight to Trump’s efforts to extend Republican seats in Texas.
To get the statewide billionaire tax proposal on the November poll, supporters want to gather practically 875,000 signatures by June 24.
The measure would impose a one-time tax of as much as 5% on taxpayers and trusts with belongings, similar to companies, artwork and mental property, valued at greater than $1 billion. It could apply to billionaires who had been residents of the state on Jan. 1, with the choice of spreading the tax fee over 5 years.
Service Staff Worldwide Union-United Healthcare Employees West, its principal backer, mentioned it is going to increase $100 billion. Most of these funds could be used for healthcare applications, with the remaining 10% going to meals help and education schemes, the union mentioned.
Suzanne Jimenez, the union’s chief of employees, mentioned Friday that “catastrophic” federal funding cuts stemming from Trump’s One Huge Lovely Invoice Act will drive hospitals to shut, eradicate healthcare jobs and trigger insurance coverage premiums to spike, leaving senior residents and veterans with restricted entry to providers.
The California Funds & Coverage Middle estimates that as many as 3.4 million Californians might lose Medi-Cal protection and rural hospitals might shut until a brand new funding supply is discovered.
Jimenez known as the proposal “a modest tax” that “impacts few individuals.”
However Gov. Gavin Newsom vowed to cease the billionaire tax, arguing that California can’t isolate itself from the opposite 49 states.
“We’re in a aggressive surroundings. Individuals have this easy luxurious, notably individuals of that standing, they have already got two or three properties outdoors the state,” Newsom mentioned on the New York Instances’ DealBook Summit final month. “It’s a easy subject. You’ve obtained to be pragmatic about it.”
The billionaire tax would briefly enhance revenues by tens of billions unfold over a number of years, but when billionaires transfer away, the state might lose “tons of of hundreds of thousands of {dollars} or extra per 12 months,” based on the nonpartisan California Legislative Analyst’s Workplace.
A few of California’s wealthiest say they’re certainly heading for the exits.
Andy Fang, the billionaire co-founder of DoorDash, wrote on social media: “I really like California. Born and raised there. However silly wealth tax proposals like this make it irresponsible for me to not plan leaving the state.”
Peter Thiel, the billionaire co-founder of PayPal and Palantir, introduced in December that his funding agency opened a brand new Miami workplace. He donated $3 million that month to a political motion committee linked to the California Enterprise Roundtable, which is preventing the measure.
State information present that Google co-founders Larry Web page and Sergey Brin have been chopping ties to California and transferring enterprise pursuits out of state.
Rick Caruso, the billionaire actual property developer who self-funded his shedding 2022 L.A. mayoral marketing campaign to the tune of greater than $100 million, mentioned in a press release that “the proposed 5% asset tax is a really dangerous coverage. It’ll ship nothing it guarantees and as an alternative harm California with misplaced jobs and tons of of hundreds of thousands a 12 months in misplaced income from current revenue taxes.”
Ending months of hypothesis, Caruso introduced Friday he is not going to problem Mayor Karen Bass once more, nor will he run for governor in a race that features billionaire hedge fund founder Tom Steyer.
In Los Angeles, supporters of the “Overpaid CEO Tax” introduced outdoors the Tesla Diner that they need to acquire 140,000 signatures within the subsequent 120 days to get the measure on the November poll. The measure would increase taxes on firms whose CEOs make a minimum of 50 occasions greater than their median-paid worker. It could apply solely to firms with 1,000 or extra workers.
The Truthful Video games Coalition, a group of labor teams together with the Los Angeles lecturers union, is sponsoring the measure, which might allocate 70% of the income to housing for working households, 20% to avenue and sidewalk repairs and 5% to after-school applications and entry to contemporary meals.
Enterprise teams have denounced it, saying it might drive firms out of town.
“Luxurious for a number of, whereas those that prepare dinner, who clear, who construct, who train, who write — the individuals who make town affluent — are stretched to the breaking level,” Kurt Petersen, co-president of the airport and resort staff union Unite Right here Native 11, mentioned at Musk’s diner, describing it as an avatar for an unjust L.A. economic system.
A related effort to extend taxes on firms with disproportionately paid CEOs is underway in San Francisco, the place voters already accepted a levy on such companies in 2020.
On Friday, Doug Herman, a spokesperson for Bass’ reelection marketing campaign, mentioned she has “not taken a place” on the state or metropolis wealth tax proposals. However at her marketing campaign launch final month, Bass framed the mayoral race as “a alternative between working individuals and the billionaire class who deal with public workplace as their subsequent vainness mission.”
Jeremy Padawer, a toy trade govt and animated TV producer who misplaced his house within the Palisades hearth, mentioned the mayor’s framing of the race as a battle in opposition to billionaires feels contrived, particularly given the extreme criticism of her dealing with of the hearth.
Energy is as related as cash, and Bass is “essentially the most highly effective particular person within the room,” mentioned Padawer, who organized the “They Let Us Burn” rally on the one-year anniversary of the hearth.
“I do know loads of billionaires,” Padawer mentioned. “And I feel that billionaires have a tendency to do loads of good, however in addition they have the propensity to do loads of dangerous.”
Instances employees author Queenie Wong contributed to this report.
