Business

Commentary: Yes, California should tax billionaires’ wealth. Here’s why

Published

2 weeks ago

January 8, 2026

Commentary: Yes, California should tax billionaires’ wealth. Here’s why

That shrill, high-pitched squeal you’ve been hearing lately? Don’t bother trying to adjust your TV or headphones, or calling your doctor for a tinnitis check. It’s just America’s beleaguered billionaires keening over a proposal in California to impose a one-time wealth tax of up to 5% on fortunes of more than $1 billion.

The billionaires lobby has been hitting social media in force to decry the proposed voter initiative, which has only started down the path toward an appearance on November’s state ballot. Supporters say it could raise $100 billion over five years, to be spent mostly on public education, food assistance and California’s medicaid program, which face severe cutbacks thanks to federal budget-cutting.

As my colleagues Seema Mehta and Caroline Petrow-Cohen report, the measure has the potential to become a political flash point.

The rich will scream The pundits and editorial-board writers will warn of dire consequences…a stock market crash, a depression, unemployment, and so on. Notice that the people making such objections would have something personal to lose.

— Donald Trump advocating a wealth tax, in 2000

Its well-heeled critics include Jessie Powell, co-founder of the Bay Area-based crypto exchange platform Kraken, who warned on X that billionaires would flee the state, taking with them “all of their spending, hobbies, philanthropy and jobs.”

Venture investor Chamath Palihapitiya claimed on X that “$500 billion in wealth has already fled the state” but didn’t name names. San Francisco venture investor Ron Conway has seeded the opposition coffers with a $100,000 contribution. And billionaire Peter Thiel disclosed on Dec. 31 that he has opened a new office in Miami, in a state that not only has no wealth tax but no income tax.

Already Gov. Gavin Newsom, a likely candidate for the Democratic nomination for president, has warned against the tax, arguing that it’s impractical for one state to go it alone when the wealthy can pick up and move to any other state to evade it.

On the other hand. Rep. Ro Khanna (D-Fremont), usually an ally of Silicon Valley entrepreneurs, supports the measure: “It’s a matter of values,” he posted on X. “We believe billionaires can pay a modest wealth tax so working-class Californians have Medicaid.”

Not every billionaire has decried the wealth tax idea. Jensen Huang, the CEO of the soaring AI chip company Nvidia — and whose estimated net worth is more than $160 billion — expressed indifference about the California proposal during an interview with Bloomberg on Tuesday.

“We chose to live in Silicon Valley and whatever taxes, I guess, they would like to apply, so be it,” he said. “I’m perfectly fine with it. It never crossed my mind once.”

And in 2000, another plutocrat well known to Americans proposed a one-time tax of 14.25% on taxpayers with a net worth of $10 million or more. That was Donald Trump, in a book-length campaign manifesto titled “The America We Deserve.”

“The rich will scream,” Trump predicted. “The pundits and editorial-board writers will warn of dire consequences … a stock market crash, a depression, unemployment, and so on. Notice that the people making such objections would have something personal to lose.” (Thanks due to Tim Noah of the New Republic for unearthing this gem.)

Trump’s book appeared while he was contemplating his first presidential campaign, in which he presented himself as a defender of the ordinary American. His ghostwriter, Dave Shiflett, later confessed that he regarded the book as “my first published work of fiction.”

All that said, let’s take a closer look at the proposed initiative and its backers’ motivation. It’s gaining nationwide attention because California has more billionaires than any other state.

The California measure’s principal sponsor, the Service Employees International Union, and its allies will have to gather nearly 875,000 signatures of registered voters by June 24 to reach the ballot. The opposition is gearing up behind the catchphrase “Stop the Squeeze” — an odd choice for a rallying cry, since it’s hard to imagine the average voter getting all het up about multibillionaires getting squoze.

The measure would exempt directly held real estate, pensions and retirement accounts from the calculation of net worth. The tax can be paid over five years (with a fee charged for deferrals). It applies to billionaires residing in California as of Jan. 1, 2026; their net worth would be assessed as of Dec. 31 this year. The measure’s drafters estimate that about 200 of the wealthiest California households would be subject to the tax.

The initiative is explicitly designed to claw back some of the tax breaks that billionaires received from the recent budget bill passed by the Republican-dominated Congress and signed on July 4 by President Trump. The so-called One Big Beautiful Bill Act will funnel as much as $1 trillion in tax benefits to the wealthy over the next decade, while blowing a hole in state and local budgets for healthcare and other needs.

California will lose about $19 billion a year for Medi-Cal alone. According to the measure’s drafters, that could mean the loss of Medi-Cal coverage for as many as 1.6 million Californians. Even those who retain their eligibility will have to pay more out of pocket due to provisions in the budget bill.

The measure’s critics observe that wealth taxes have had something of a checkered history worldwide, although they often paint a more dire picture than the record reflects. Twelve European countries imposed broad-based wealth taxes as recently as 1995, but these have been repealed by eight of them.

According to the Tax Foundation Europe, that leaves wealth taxes in effect only in Colombia, Norway, Spain and Switzerland. But that’s not exactly correct. Wealth taxes still exist in France and Italy, where they’re applied there to real estate as property taxes, and in Belgium, where they’re levied on securities accounts valued at more than 1 million euros, or about $1.16 million.

Switzerland’s wealth tax is by far the oldest, having been enacted in 1840. It’s levied annually by individual cantons on all residents, at rates reaching up to about 1% of net worth, after deductions and exclusions for certain categories of assets.

The European countries that repealed their wealth taxes did so for varied reasons. Most were responding at least partially to special pleading by the wealthy, who threatened to relocate to friendlier jurisdictions in a continent-wide low-tax contest.

That’s the principal threat raised by opponents of the California proposal. But there are grounds to question whether the effect would be so stark. For one thing, notes UC Berkeley economist Gabriel Zucman, an advocate of wealth taxes generally, “it has become impossible to avoid the tax by leaving the state.” Billionaires who hadn’t already established residency elsewhere by Jan. 1 this year have missed a crucial deadline.

The initiative’s drafters question the assumption that millionaires invariably move from high- to low-tax jurisdictions, citing several studies, including one from 2016 based on IRS statistics showing that elites are generally unwilling to move to exploit tax advantages across state lines.

As for the argument that billionaires could avoid the tax by moving assets out of the state, “the location of the assets doesn’t matter,” Zucman told me by email. “Taxpayers would be liable for the tax on their worldwide assets.”

One issue raised by the burgeoning controversy over the California proposal is how to extract a fair share of public revenue from plutocrats, whose wealth has surged higher while their effective tax rates have declined to historically low levels.

There can be no doubt that in tax terms, America’s wealthiest families make out like bandits. The total effective tax rate of the 400 richest U.S. households, according to an analysis by Zucman, his UC Berkeley colleague Emmanuel Saez, and their co-authors, “averaged 24% in 2018-2020 compared with 30% for the full population and 45% for top labor income earners.” This is largely due to the preferences granted by the federal capital gains tax, which is levied only when a taxable asset is sold and even then at a lower rate than the rate on wage income.

The late tax expert at USC, Ed Kleinbard, used to describe the capital gains tax as our only voluntary tax, since wealthy families can avoid selling their stocks and bonds indefinitely but can borrow against them, tax-free, for funds to live on; if they die before selling, the imputed value of their holdings is “stepped up” to their value at their passing, extinguishing forever what could be decades of embedded tax liabilities. (The practice has been labeled “buy, borrow, die.”)

Californians have recently voted to redress the increasing inequality of our tax system. Voters approved what was dubbed a “millionaires tax” in 2012, imposing a surcharge of 1% to 3% on incomes over $263,000 (for joint filers, $526,000). In 2016, voters extended the surcharge to 2030 from the original phase-out date of 2016. That measure passed overwhelmingly, by a 2-to-1 majority, easily surpassing that of the original initiative.

But it may be that California’s ability to tax billionaires’ income has been pretty much tapped out. Some have argued that one way to obtain more revenue from wealthy households is to eliminate any preferential rate on capital gains and other investment income, but that’s not an option for California, since the state doesn’t offer a preferential tax rate on that income, unlike the federal government and many other states. The unearned income is taxed at the same rate as wages.

One virtue of the California proposal is that, even if it fails to get enacted or even to reach the ballot, it may trigger more discussion of options for taxing plutocratic fortunes. One suggestion came from hedge fund operator Bill Ackman, who reviled the California proposal on X as “an expropriation of private property” (though he’s not a California resident himself), but acknowledged that “one shouldn’t be able to live and spend like a billionaire and pay no tax.”

Ackman’s idea is to make loans backed by stock holdings taxable, “as if you sold the same dollar amount of stock as the loan amount.” That would eliminate the free ride that investors can enjoy by borrowing against their holdings.

The debate over the California wealth tax may well hinge on delving into plutocrat psychology. Will they just pay the bill, as Huang implies would be his choice? Or relocate from California out of pique?

California is still a magnet for the ambitious entrepreneur, and the drafters of the initiative have tried to preserve its allure. Those who come into the state after Jan. 1 to pursue their ambitious dreams of entrepreneurship would be exempt, as would residents whose billion-dollar fortunes came after that date. There may be better ways for California to capture more revenue from the state’s population of multibillionaires, but a one-time limited tax seems, at this moment, to be as good as any.

Business

Autodesk to cut 1,000 workers as the tech company bets on AI

Published

7 hours ago

January 24, 2026

Press Room

Autodesk to cut 1,000 workers as the tech company bets on AI

Software company Autodesk is slashing roughly 1,000 roles, representing a 7% cut of its global workforce.

The San Francisco company, which makes software used by architects, designers and engineers, told its employees Thursday that “strategic shifts,” including its focus on expanding its leadership in artificial intelligence, fueled its latest round of cuts.

Workers in “customer-facing sales” roles will be significantly affected by the layoffs, and the cost savings will be reinvested in the company’s priorities through the fiscal year ending January 2027, the company said in a filing to the U.S. Securities and Exchange Commission.

While the rise of artificial intelligence that can generate code, text and images has heightened fears that technology will displace workers, Autodesk Chief Executive and President Andrew Anagnost told employees that isn’t what is driving the cuts.

“I want to be clear that this will not become an annual process at Autodesk and these changes are not driven by the external environment or an effort to replace people with AI,” he told employees in an e-mail on Thursday. “We remain steadfast in our belief that technology is only as powerful as the people who use it and humans will always be the most important part of the equation.”

The company changed how customers purchase and renew its software subscriptions, asking them to pay Autodesk directly.

Autodesk declined to share how many of the layoffs are happening in California. The company has offices outside of the United States, including in Europe and Asia.

The company plans to lay off roughly 104 employees at its San Francisco headquarters in April, according to a Thursday letter to the California Employment Development Department.

Autodesk is the latest California tech company this year to announce another massive round of cuts, even after already shrinking its workforce in 2025. Last year, Autodesk said it would cut roughly 1,350 positions, or roughly 9% of its workforce, citing geopolitical and macroeconomic factors and its AI investments.

Meta, the parent company of Facebook and Instagram, is also slashing its workforce again and closing several content studios as it focuses more heavily on investing in wearables such as smartglasses. The layoffs hit more than 1,000 employees and focused heavily on those who were working on the metaverse, digital spaces where people socialize, work, learn and pursue other online activities.

In the third quarter ending in October 2025, Autodesk’s revenue increased 18% to $1.85 billion. The company’s net income during that quarter was $343 million, up from $275 million.

Business

TikTok has finalized its U.S. joint venture, ending saga over its fate

Published

19 hours ago

January 23, 2026

Press Room

TikTok has finalized its U.S. joint venture, ending saga over its fate

The long and winding road over the fate of TikTok — the enormously popular social video platform that has been a force in American youth culture and entertainment — has come to an end.

After years of questions about TikTok’s future in America, the social media platform and its Chinese parent company, ByteDance, have finalized the app’s U.S. joint venture.

The announcement closes the chapter on a saga that began six years ago when President Trump during his first term sought to ban the platform, citing national security concerns involving ByteDance.

But Trump shifted his views on the platform after ByteDance and its affiliates agreed to divest majority ownership of U.S. operation to an American-led investor group.

The joint venture deal was established under an executive order signed by Trump in September.

In an announcement posted Thursday, TikTok said the U.S. joint venture now has three managing investors: Silver Lake, Oracle and Emirati investment firm MGX, each holding 15%, with ByteDance retaining 19.9% of investments.

The new firm will be headed by Adam Presser, who previously worked as TikTok’s head of operations and trust and safety. He will join a seven-member, majority-American board of directors that includes TikTok’s Chief Executive Shou Zi Chew.

In a Truth Social post, Trump thanked Chinese leader Xi Jinping “for working with us and, ultimately, approving the Deal” and said it was a “dramatic, final, and beautiful conclusion.”

“I am so happy to have helped in saving TikTok!” he wrote. “I only hope that long into the future I will be remembered by those who use and love TikTok.”

ByteDance had been under pressure to divest its ownership in the app’s U.S. operations or face a nationwide ban after Congress passed a law that went into effect a year ago.

“China’s position on TikTok has been consistent and clear,” Guo Jiakun, a Chinese Foreign Ministry spokesperson in Beijing, said Friday according to the Associated Press.

Under new safeguards, there will be more protections for users’ data and algorithms, as well as better content moderation and software assurances, the company said.

The new version will operate under “defined safeguards that protect national security through comprehensive data protections, algorithm security, content moderation, and software assurances for U.S. users,” the company said in its statement Thursday.

These protections will be secured by Oracle’s cloud environment. The tech company’s Executive Chairman Larry Ellison has also been making headlines for attempting to purchase Warner Bros. Discovery through Paramount.

Ramesh Srinivasan, professor of information studies at UCLA, said he finds the deal to be “deeply concerning.” He said TikTok will become more similar to American-owned social media applications when it comes to access to data and how it’s monetized.

“But at the same time, the data is going to be captured by folks like Mr. Ellison, who is very close to the president,” said Srinivasan. “That raises major concerns about the incredibly close affinity the president has with these tech oligarchs. This means TikTok will increasingly serve the dictates of this administration.”

Srinivasan also raises concerns that this deal could influence what people can see on their algorithms, especially when it comes to global news.

He added, “Our younger people may end up getting manipulated without any disclosure or knowledge.”

According to TikTok, there are over 200 million U.S. users and 7.5 million businesses that use the platform.

The news, announced last month, comes as a relief to many U.S.-based influencers, many of whom operate in Southern California, who rely on the social media platform for their livelihoods. The same day the news of the joint venture broke, TikTok hosted its inaugural TikTok Awards at the Hollywood Palladium. Keith Lee, a food reviewer with over 17 million followers, celebrated the announcement among other attendees.

“[TikTok] is the best way to reach people and I know so many people who rely on it to support their families,” said Lee, in an interview with The Times. “For me, it’s my career now so I can’t imagine it not being around.”

The app is largely responsible for reshaping the way young Americans shop and consume entertainment. One example of that can be found in the TikTok Shop platform where small businesses and brands sell their products directly to consumers and engage influencers to help with promotion. In many ways, the platform can resemble Gen Z’s version of QVC.

The app’s roots date back to 2014, when Musical.ly, an app of a similar nature was launched in Shanghai. In 2016, Chinese tech company ByteDance launched a similar platform in China called Douyin. As the apps grew in popularity separately, ByteDance picked up on its potential, purchased Musical.ly in 2017 and combined all these platforms into one, named TikTok. Over the next few years, the app began its rapid ascent , hooking in users with a curated algorithm and viral trends.

The deal removes a shadow that was cast over the future of TikTok, which has become one of the world’s most dominant social media platforms and has a large presence in Culver City. The company’s business in the U.S. had been uncertain for many years amid legislators’ security concerns about ByteDance’s ties to China.

Trump allowed TikTok to keep operating in the country and in September signed the executive order outlining the new joint venture.

Business

Port of Los Angeles plans for growth after ‘roller coaster’ year

Published

1 day ago

January 23, 2026

Press Room

Port of Los Angeles plans for growth after ‘roller coaster’ year

As economic uncertainty and steep tariffs shook global trade in 2025, the Port of Los Angeles remained the busiest marine gateway in the country and recorded its third busiest year ever.

Executive director Gene Seroka outlined investments in infrastructure, technology and climate initiatives at the 11th annual State of the Port on Thursday. Near the waterfront in San Pedro, Seroka addressed a 930-person crowd that included Los Angeles Mayor Karen Bass and Los Angeles City Councilmember Tim McOsker.

The port is getting ready to meet ambitious climate goals and accommodate increasing cargo volume in the decades ahead, Seroka said. In 2028, the port will host six boating and sailing events during the Summer Olympic Games.

“From accelerated dips in volume to record highs, [2025] truly was a roller coaster,” Seroka said Thursday. “Cargo remains the lifeblood of the U.S. economy. American farmers, manufacturers, retailers and consumers all depend on how well we move that cargo.”

The Port of Los Angeles moved 10.2 million cargo containers last year, representing a less than 1% decrease from 2024. The port’s busiest year on record was 2021, when it processed 10.6 million containers in the midst of the pandemic.

2025 was characterized by volatility, Seroka said, as manufacturers and merchants scrambled to keep up with President Trump’s changing tariffs on key trade partners. As shippers frontloaded their goods to get ahead of import taxes, cargo volumes swung high and low.

In April, the port moved 842,806 containers, 9% more compared with the same time period in 2024. In May, cargo volume fell to 5% lower than the year prior. July was the busiest month in the port’s 118-year history with more than 1 million containers moved.

“Despite uncertainty and global instability regarding changing tariffs policies, the port stood strong, rising to the occasion and meeting this moment,” said Bass on Thursday.

The Port of Los Angeles has been the busiest in the U.S. for 26 consecutive years and generated $333 billion in trade in 2024. Combined, the ports of Los Angeles and Long Beach account for one out of every nine jobs in Los Angeles, Orange, Riverside, San Bernardino and Ventura counties.

As Seroka shared his vision for the future in the cavernous AltaSea facility, he emphasized the need to build bigger and smarter. Groups of stakeholders including terminal operators, cruise lines and union representatives sat at large round tables with green table cloths and floral centerpieces.

Applause followed the announcement that the latest air emissions report showed the Port of Los Angeles had achieved the lowest emissions on a per-container basis of any port in the world.

“We are moving more cargo than ever before with the lowest pollution footprint on record for every container shipped,” Seroka said.

Seroka also announced that the port saw a record 1.6 million passengers on 241 cruise calls last year. Pacific Cruise Terminals will build a new world-class cruise ship center in the port’s outer harbor, he said.

To maximize capacity for newer and bigger container ships, Seroka wanted to raise the 185-feet-high Vincent Thomas Bridge, which connects San Pedro to Terminal Island and Long Beach. Last November, the California State Transportation Agency rejected plans to raise the bridge during a planned re-decking project.

In October, the port released a Request for Proposals to evaluate the feasibility of a new Pier 500 marine container terminal that would increase the port’s capacity while staying on track with climate goals, Seroka said.

Several other infrastructure projects are on the horizon, such as the Maritime Support Facility being developed on 80 acres of land on Terminal Island as well as the Avalon Pedestrian Bridge, which will offer access to the new Wilmington Waterfront Promenade.

“This port must be ready for whatever is coming,” Seroka said. “Shifting trade policies are creating uncertainty and volatility, and the maritime supply chain is at the center of it all.”

Laurence Darmiento contributed to this report.