California Gov. Gavin Newsom has found a tax he doesn’t like — his own. As the New York Post editorial board notes, the governor is fighting a ballot measure that would slap a one-time 5% levy on Californians worth more than $1 billion, even as he barnstorms the country pitching a wealth tax for the entire nation.
Let that sink in. The tax Newsom won’t stomach in Sacramento is the one he wants to export to all 50 states.
The California measure, pushed by the SEIU-United Healthcare Workers West union, already gathered more than 900,000 signatures to qualify for the ballot. Its backers even offered to cut the rate from 5% to 2% to win the governor over. He still said no — and for good reason. He can see what’s already happening.
The state’s wealthiest residents aren’t waiting around to be soaked. Google co-founder Sergey Brin moved 15 of his LLCs out of California. Former Uber chief Travis Kalanick decamped to Austin, Texas, in December. Palantir chairman Peter Thiel — who spent $3 million fighting the billionaire tax — recently bought property in Argentina. DoorDash co-founder Andy Fang called the levy flat-out “stupid” and said it would be irresponsible for him to stick around if it passed.
They have plenty of runway. Felipe Silva, a Uruguay-based adviser with real-estate firm Engel & Völkers, says his country is drawing the wealthy in droves, “particularly from California and New York,” thanks to its business climate and safety. When the people who write the biggest checks start shopping for exits, the revenue projections that make a wealth tax look painless quietly collapse.
History already ran this experiment. Of the 12 OECD nations that imposed wealth taxes in the 1990s, eight later scrapped them — revenues came up short, economies sagged, and the paperwork proved a nightmare. Germany’s high court declared its version unconstitutional in 1997; the Netherlands struck down its own in 2021 as a violation of European property-rights law. There’s a live argument that a federal wealth tax would run into the same constitutional wall in the United States.
Then there’s the fairness pitch, which doesn’t survive contact with the IRS data. The top-earning 1% of Americans already pay 40% of all federal income taxes while earning 22% of the income. The bottom half of earners pay just 3%. Whatever the “make them pay their fair share” slogan is describing, it isn’t the current code.
So why the sudden conversion? Newsom is widely expected to run for president in 2028, and a national tax-the-rich crusade plays well with the Democratic base that decides primaries. It plays considerably worse with anyone who has watched billionaires pack up and leave — or read the receipts from every country that tried this before.
The governor already knows how the story ends. He’s living it in his own state. He just wants to make it everyone else’s problem, too.
Source: nypost.com
