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Explaining California’s billionaire tax: The proposals, the backlash and the exodus

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Explaining California’s billionaire tax: The proposals, the backlash and the exodus

The battle over a new tax on California’s billionaires is set to heat up in the coming months as citizens spar over whether the state should squeeze its ultra-rich to better serve its ordinary residents.

The proposed billionaire tax that triggered the tempest is still far from being approved by voters or even making the ballot, but the idea has already sparked backlash from vocal tech moguls — some of whom have already shifted their bases outside the state.

Under the Billionaire Tax Act, Californians worth more than $1 billion would pay a one-time 5% tax on their total wealth. The Service Employees International Union-United Healthcare Workers West, the union behind the act, said the measure would raise much-needed money for healthcare, education and food assistance programs.

Other unions have piled on billionaires, targeting the rich in Los Angeles.

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A group of Los Angeles labor unions said Wednesday that it is proposing a ballot measure to raise taxes on companies whose chief executive officers earn 50 times more than their median-paid employees.

Here is how this fight could continue to play out in the Golden State:

Who would be affected?

The California billionaire tax would apply to about 200 California billionaires who reside in the state as of Jan. 1. Roughly 90% of funds would go to healthcare and the rest to public K-14 education and state food assistance.

The tax, due in 2027, would exclude real estate, pensions and retirement accounts, according to an analysis from the Legislative Analyst’s Office, a nonpartisan government agency. Billionaires could spread out the tax payment over five years, but would have to pay more.

Which billionaires are already distancing themselves from California?

Google co-founders Larry Page and Sergey Brin

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Google is still headquartered in California, but December filings to the California Secretary of State show other companies tied to Page and Brin recently converted out of the state.

One filing, for example, shows that one of the companies they managed, now named T-Rex Holdings, moved from Palo Alto to Reno last month.

Business Insider and the New York Times earlier reported on these filings. Google didn’t respond to a request for comment.

Palantir co-founder Peter Thiel

Thiel Capital, based in Los Angeles, announced in December it opened an office in Miami. The firm didn’t respond to a request for comment. Thiel recently contributed $3 million to the political action committee of the California Business Roundtable, which is opposing the ballot measure, records provided to the Secretary of State’s Office show.

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Oracle co-founder and Chief Technology Officer Larry Ellison

Years before the wealth tax proposal, Ellison began pulling back from California, but he’s continued to distance himself farther from the state since the proposal emerged.

Last year, Ellison sold his San Francisco mansion for $45 million. The home on 2850 Broadway was sold off-market in mid-December, according to Redfin.

Oracle declined to comment.

DoorDash co-founder and Chief Technology Officer Andy Fang

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Fang, who was born and raised in California, said on X that he loves the state but is thinking about moving.

“Stupid wealth tax proposals like this make it irresponsible for me not to plan leaving the state,” he said.

DoorDash didn’t respond to a request for comment.

What would it still take to become law?

To qualify for the ballot, proponents of the proposal, led by the healthcare union, must gather nearly 875,000 registered voter signatures and submit them to county elections officials by June 24.

If it makes it on the November ballot, the proposal would be the focus of intense scrutiny and debate as both sides have already lined up big war chests to bombard voters with their positions. A majority of voters would need to approve the ballot measure.

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Lawyers for billionaires have also signaled the battle won’t be over even if the ballot measure passes.

“Our clients are prepared to mount a vigorous constitutional challenge if this measure advances,” wrote Alex Spiro, an attorney who has represented billionaires such as Elon Musk in a December letter to California Gov. Gavin Newsom.

What are the initiative’s chances?

It’s unclear if the ballot measure has a good chance of passing in November. Newsom opposes the tax, and his support has proved important for ballot measures.

In 2022, he opposed a ballot measure that would have subsidized the electric vehicle market by raising taxes on Californians who earn more than $2 million annually. The measure failed. The following year, he opposed legislation to tax assets exceeding $50 million. The bill was shelved before the Legislature could vote on it. A bill that would impose an annual tax on California residents whose net worth surpassed $30 million also failed in 2020.

However, Sen. Bernie Sanders (I-Vt.) and Rep. Ro Khanna (D-Fremont) have backed the wealth tax proposal, and Californians have passed temporary tax measures before. In 2012, they approved Proposition 30 to increase sales tax and personal income tax for residents with an annual income of more than $250,000.

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Could it solve California’s problems?

The Legislative Analyst’s Office said in a December letter that the state would probably collect tens of billions of dollars from the wealth tax, but it could also lose other tax revenue.

“The exact amount the state would collect is very hard to predict for many reasons. For example, it is hard to know what actions billionaires would take to reduce the amount of tax they pay. Also, much of the wealth is based on stock prices, which are always changing,” the letter said.

California economist Kevin Klowden said the tax could create future budget problems for the state. “The catch is that this is a one-off fix for what is a systemic problem,” he said.

Supporters of the proposal said the measure would raise about $100 billion and pushed back against the idea that billionaires would flee.

“We see a lot of cheap talk from billionaires,” said UC Berkeley law professor Brian Galle, who helped write the proposal. “Some people do actually leave and change their behavior, but the vast bulk of wealthy people don’t, because it doesn’t make sense.”

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Still, the pushback has been escalating.

Palo Alto-based venture capitalist Chamath Palihapitiya estimates that the lost revenues from the billionaires who have already left the state would lead to more losses in tax revenues than gained by the new tax.

“By starting this ill-conceived attempt at an asset tax, the California budget deficit will explode,” he posted on X. “And we still don’t know if the tax will even make the ballot.”

The union backing the initiative says “the billionaire exodus narrative” is “wildly overstated.”

“Right now, it appears the overwhelming majority of billionaires have chosen to stay in California past the Jan. 1 deadline,” said Suzanne Jimenez, chief of staff at SEIU-United Healthcare Workers West. “Only a very small percentage left before the deadline, despite weeks of Chicken Little talking points claiming a modest tax would trigger a mass departure.”

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Times staff writer Seema Mehta contributed to this report.

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Bessent flips script on Dem senator with reminder about his son’s past ties to Epstein

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Bessent flips script on Dem senator with reminder about his son’s past ties to Epstein

NEWYou can now listen to Fox News articles!

Sen. Ron Wyden, D-Ore., suddenly found himself on the defensive at a budget hearing on Wednesday when, amid levying accusations of the Trump administration’s “corrupt” dealings, Treasury Secretary Scott Bessent fired back by bringing Wyden’s son’s investments into the exchange.

“We would like to hear what Adam Wyden and Jeffrey Epstein talked about,” Bessent said, referring to unearthed emails drawing a connection between the senator’s son and the disgraced financier.

“Did your son and Jeffrey Epstein talk about pole dancing as he begged him for money?”

The moment continues the political fallout for the many names associated with Epstein that — despite not amounting to proof of wrongdoing — continue to prompt embarrassment and scandal at even the smallest mention.

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TOP FIERY MOMENTS AS DEMOCRATS CLASH WITH TREASURY SECRETARY BESSENT IN CHAOTIC HILL HEARINGS

Treasury Secretary Scott Bessent, left, pictured along Sen. Ron Wyden, D-Ore, right. (Aaron Schwartz/Bloomberg via Getty Images; Chip Somodevilla/Getty Images)

Epstein, a former financier, died while in prison on charges of sex trafficking minors in 2019, leaving behind questions of whether he facilitated illegal sexual encounters for his vast network of rich and powerful figures.

Amid public demands for transparency on the matter, the Department of Justice released troves of documents on Epstein late last year, unveiling a slew of new names with all manner of ties to the infamous figure ranging from purely innocuous to alarming.

Among them, emails surfaced indicating that Adam Wyden, Ron Wyden’s son, went to Epstein, hoping to gain his support for a business venture.

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UNEARTHED EMAILS REVEAL DEM SENATOR’S SON WANTED EPSTEIN TO JOIN HIS FUND: ‘ENJOYED OUR CONVERSATION’

Sen. Ron Wyden leaves a Senate Democratic meeting at the U.S. Capitol Building in Washington, D.C., on Oct. 3, 2025, as the federal government shuts down after Congress and the White House failed to reach a funding deal. (Kevin Dietsch/Getty Images)

“Jeffrey, I wanted to thank you for taking the time to meet with me. I thoroughly enjoyed our conversation and hope my passion and dedication for my business came through in the meeting. I live and breathe this business and take my returns, integrity and reputation quite seriously,” the younger Wyden said in an email in April 2016.

“I intensely appreciate like-minded individuals and would very much look forward to having you join us at the fund.”

The emails came after Epstein pleaded guilty to soliciting a minor for prostitution in Florida in 2008.

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It’s unclear what the business venture discussed by Adam Wyden and Epstein may have been or what, specifically, had been discussed in their conversations.

Even so, Bessent reminded viewers that the younger Wyden had a history of investing in off-color markets at Wednesday’s hearing.

DEMOCRATS ARE HAMMERING REPUBLICANS ON EPSTEIN, BUT ONE SENATOR BRUSHED OFF THE ISSUE YEARS AGO

Treasury Secretary Scott Bessent addresses a press conference in Rosenbad after trade talks between the U.S. and China concluded in Stockholm, Sweden, on July 29, 2025. (Magnus Lejhall/TT News Agency/AFP via Getty Images)

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Your son’s largest investment position was Rick’s Cabaret,” Bessent said, referring to a series of strip clubs.

Wyden, who has widely panned the Trump administration and its many officials for their own connections to Epstein, didn’t respond to Bessent’s jabs.

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Hilton and Becerra lead California’s unsettled governor’s race; Steyer faces elimination

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Hilton and Becerra lead California’s unsettled governor’s race; Steyer faces elimination

As election officials continued tallying ballots Wednesday, Republican Steve Hilton and Democrat Xavier Becerra continued to lead in the unsettled race to replace termed-out Gov. Gavin Newsom, with billionaire Democrat Tom Steyer hoping for a surge in late-arriving votes to push him into one of the top-two spots to advance to the November general election.

Hilton, a British immigrant and former Fox News commentator, told reporters outside the state Capitol in Sacramento Wednesday morning that he was “very encouraged” by the latest results, though he stopped short of declaring victory.

“It does look as if change is coming to California, and that is good news for everyone, every small business, every working family, everyone who wants to see our state set back on track,” he said.

Becerra and Steyer did not hold public events as of Wednesday afternoon.

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Election data analyst Paul Mitchell said it would be nearly mathematically impossible for Steyer to close the gap.

“As we start to get more data, the runway is going to get shorter and shorter,” he said.

He said Steyer, to finish in the top two in the primary, would have to get about 30% of the remaining uncounted votes while Becerra would need to be limited to 15%. The self-funded billionaire has “a very high hill to overcome, and the challenge gets steeper and steeper as we get more data from the counties,” Mitchell said.

Once mired near the bottom of a crowded pack of Democrats in opinion polls, Becerra, a former Biden administration cabinet member, rocketed ahead of his rival candidates after former Rep. Eric Swalwell dropped out of the race in April amid allegations of sexual assault and misconduct. The scandal triggered an upswing of voter interest in California’s once sluggish governor’s race and in Becerra, who seized the moment.

“Here in Hollywood’s hometown, we love a good underdog story,” Becerra told cheering supporters at his election night party at La Plaza de Cultura y Artes in downtown Los Angeles.

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Becerra spoke about his Mexican immigrant parents and becoming the first in his family to attend college. Though a longtime California politician, Becerra said that his campaign for governor was outspent and that he faced calls to drop out of the race.

“The underdog stayed in the fight,” he said. “Like my parents, I never gave up. … Never stopped believing in the beacon-light goodness of California and thankfully, neither did you.”

Steyer, who spent more than $216 million of his wealth on the race, has not conceded defeat.

His campaign manager, Heather Hargreaves, wrote in a letter to supporters Wednesday that “we’re going to give democracy time to work. County election officials are still counting ballots and don’t expect to know how many people voted in total until” Thursday, when officials are required to report the estimated number ballots left to process.

The billionaire former hedge fund owner campaigned against the corporate and special interests that have a powerful presence in Sacramento and often spend heavily in elections, including this year against Steyer.

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Billionaires “do everything they can to hoard their wealth and avoid paying taxes, and we see corporations continue to rig the system for themselves — raising your prices to juice their profits. Screw that,” Steyer said at his election watch party at the Regency Ballroom in San Francisco.

Other candidates in the race included Republican Riverside County Sheriff Chad Bianco and Democrats including former Rep. Katie Porter, San José Mayor Matt Mahan, former Los Angeles Mayor Antonio Villaraigosa and state Supt. of Public Instruction Tony Thurmond.

Villaraigosa, Mahan and Porter conceded the race Tuesday night.

California’s 2026 race for governor started slow but ended with a flourish, including the demise of a scandal-ridden Democratic favorite, the anointing of a Republican by Trump and Becerra’s unexpected rise from the depths of the candidate field.

Unlike gubernatorial elections in the last quarter of a century, this year’s race lacked a clear crowd-pleasing front-runner able to win over voters, such as movie star Arnold Schwarzenegger or Jerry Brown, a sage of the California electorate and scion of a storied political family. But it unfolded at a time when the state’s residents are overwhelmed by high housing costs, steep gas prices and overall unaffordability that threatens the “California dream” that once drew millions of people to the state.

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“Normal people are not living and breathing politics on a daily basis,” said Tim Rosales, a strategist who ran Republican John Cox’s unsuccessful 2018 gubernatorial campaign. In today’s information-saturated environment, Rosales said, the race and its roster of “extremely milquetoast candidates” didn’t break through until the Swalwell scandal grabbed voters’ attention.

The 2026 gubernatorial primary has been one of the most unpredictable and expensive in decades and a race that was shaped early on by a number of heavyweight Democrats staying on the sidelines.

Though supporters urged them to run, former Vice President Kamala Harris, Sen. Alex Padilla and Atty. Gen. Rob Bonta passed on the race. It was in a state of limbo for months last year as Harris, one of the state’s most high-profile politicians, weighed whether to jump in.

“I don’t ever recall a playing field that looks like this one. Usually there’s a clear front-runner,” said veteran Democratic strategist Darry Sragow. “It’s easy to say that it reflects a lack of talent [but] that’s absolutely not true. Almost any of the candidates running could make a good governor.”

Still, candidates struggled for months to break through to voters.

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In February, polls showed the crowded field of Democrats splitting liberal voters and opening a statistical possibility that the party would be boxed out of November under California’s open, top-two primary, which places all candidates on the same ballot. Only the first- and second-place finishers in the primary advance to the general election, regardless of their party affiliation.

Just when Swalwell appeared on the cusp of becoming the Democratic front-runner the San Francisco Chronicle and CNN published allegations that he sexually assaulted a former staffer and acted inappropriately with other women. Swalwell suspended his campaign.

It was Becerra who benefited the most. In less than two months, he vaulted from polling in the low single digits to the top of the field of candidates, according to surveys conducted by UC Berkeley’s Institute of Governmental Studies that were co-sponsored by the Los Angeles Times.

“Becerra caught lightning in a bottle,” Rosales said. “It could have easily gone to any of the other candidates,” but many had baggage. Videos of Porter losing her temper hurt her image, the source of Steyer’s wealth and his unbridled campaign spending weighed on voters’ minds, and Villaraigosa and Mahan were “more centrist than what most Democrats wanted, and so Xavier Becerra was really the safe choice,” Rosales said.

Before Democratic voters began to narrow down their choices, Trump endorsed Hilton in early April. It helped the former Fox News host break away from Bianco, his main GOP rival.

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In the days before the primary election, the race solidified into a three-way contest involving Becerra, Steyer and Hilton.

Steyer stepped up his fight in the remaining days, seeking to squeeze into one of the top two spots by battering Becerra in ads and at campaign rallies as a politician propped up by corporate special interests.

“We cannot afford to have a governor who’s been bought off by Big Oil. Period,” he said at a Sunday rally in Los Angeles.

Corporations, along with labor unions and interest groups including the California Assn. of Realtors, had spent more than $18.7 million to boost Becerra, according to the election spending tracker California Target Book. Many of the same groups also gave money to a committee intended to attack Steyer.

As the election neared, Becerra sharpened his attacks against Steyer, calling the billionaire a “liar” and accusing him of trying to buy the election.

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“We are not going to let a billionaire or Trump’s handpicked candidate take over this state,” he said during a Sunday rally in Long Beach.

If Becerra faces off with Hilton in November he’ll have a distinct advantage. Democratic voters outnumber Republicans nearly 2 to 1 in left-leaning California.

Winning the general election would make the 68-year-old Becerra the first elected Latino governor of California. At roughly 40% of the state’s population, Latinos are California’s largest ethnic group but have not been represented in the governor’s mansion since 1875, when then-Lt. Gov. Romualdo Pacheco was elevated to fill a 10-month vacancy.

Times staff writers Iris Kwok, Susanne Rust, Andrew Khouri and Christopher Goffard contributed to this report.

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Video: Steve Hilton Holds Slim Early Lead in California Governor’s Race

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Video: Steve Hilton Holds Slim Early Lead in California Governor’s Race

new video loaded: Steve Hilton Holds Slim Early Lead in California Governor’s Race

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Steve Hilton Holds Slim Early Lead in California Governor’s Race

Steve Hilton, a Republican and former Fox News host, held a narrow lead in early votes over two Democratic opponents in California’s nonpartisan primary for governor. The top two candidates will advance to the general election in November.

“Change is coming to California, and it’s long overdue. I want to just say something from my heart to every single person who’s voted for me. We’re not — We’re not there yet, but it’s looking good.” [cheers] “Tonight, the people of the great state of California, in the greatest nation on earth, have spoken. [cheers] Loudly and proudly. [cheers] And while I take nothing for granted, there are lots of ballots left to be counted, it appears that we are on track to advance to November.” [cheers] “It might take some time to figure out where this is going. We’re going to wait until every ballot is counted. We’re going to give democracy a time to work, and we know we finished really strong.” [cheers]

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Steve Hilton, a Republican and former Fox News host, held a narrow lead in early votes over two Democratic opponents in California’s nonpartisan primary for governor. The top two candidates will advance to the general election in November.

By Axel Boada

June 3, 2026

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