Washington Post warns California billionaire tax proposal could backfire
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The Washington Post’s editorial board is warning California that aggressive new taxes on the ultra-rich could backfire by driving billionaires out of the state.
One Editorial published on Thursday In an article titled “California will miss its billionaires when they’re gone,” the Post’s editorial board argued that the state would have serious economic consequences by alienating wealthy residents.
The board compared California’s tax approach to teenage boys using cologne and argued that while some taxation was necessary, too much quickly became counterproductive.
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The Washington Post editorial board is warning California that aggressive new taxes on the ultra-rich could backfire by driving billionaires out of the state.
“Some [taxes] The board wrote that utilities should be paid for, but the government eventually reached the point where returns were diminishing, prompting it to push back.
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The editorial noted that when California voted years ago to increase tax rates on high-income households, many of its top earners began leaving the state or reducing their taxable income.
Despite the exodus, a proposed ballot initiative could emerge in November that would impose a 5% wealth tax on the state’s billionaires.
According to the Post, “Larry Page and Peter Thiel set up residences before the end of the year in case the wealth tax passes.” (Eva Marie Uzcategui/Bloomberg via Getty Images)
Regarding the move to raise taxes, the Post praised the state’s current Democratic governor, noting: “Governor Gavin Newsom (D) opposes a wealth tax because he understands it would kill the Golden State’s golden goose.”
The Post editorial board reported that several billionaires, including Google co-founder Larry Page and Palantir co-founder Peter Thiel, want to leave California before that possibility comes true.
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The board warned that California’s tax system is already heavily focused at the top, making the state vulnerable if wealthy residents move. The report cited a 2024 study that found previous tax increases wiped out nearly half of expected income in a year as high earners went elsewhere or adjusted their taxable income.
The editorial noted that when California voted years ago to increase tax rates on high-income households, many of its top earners began leaving the state or reducing their taxable income. (Sheldon Cooper/SOPA Images/LightRocket via Getty Images)
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The editorial argued that after the top earners left, activists “will target the next ‘rich’ people who do not have the flexibility to escape.” The board called that scenario a “disaster” for California’s economy and urged voters to reject proposals for higher taxes on the wealthy.
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