My immediate reaction to learning that there will be a referendum to tax the assets of billionaires was “Why should I care?”
As my finger hovered over the delete button, I realized that the details indicated that such a tax could increase my taxes.
How so?
Taxing the assets of billionaires to fund education, food services, and healthcare.
This is not instead of the other taxes billionaires already pay, it is in addition to those taxes.
This is not a new concept for Democrats as a “billionaire minimum income tax” was included in the Biden-Harris White House budget proposal announced in March 2022.
The “2026 Billionaire Tax Act”
On September 17, 2025, Oregon Senator Ron Wyden (D) had twenty co-sponsors for the “Billionaire Tax Act.” The plan was unveiled in November 2025 when the Service Employees International Union-United Healthcare Workers West filed with the California Attorney General a ballot initiative for a referendum on a one-time 5% tax on the net worth of California residents with assets over $1 billion.
Why would anyone believe that a tax to fund the ongoing costs of education, food services, and healthcare (all exaggerated by illegals?), will only require a “one-time” tax?
Impact
The following hypothetical will assist in understanding some of the impact.
Suppose a one-time tax of 5% of assets of over a million dollars was placed on Santa Barbarians.
Many Santa Barbarians would qualify based on the recent data that shows the median cost of single-family homes in Santa Barbara is around $2.5 - $2.8 million, while Zillow suggests an average value closer to $1.75 million. Condo prices are significantly lower, with recent figures around $987,000 - $1.37 million, placing Santa Barbara among the nation’s most expensive markets.
Based solely on the value of real estate of $1.75 million, a 5% tax would be $87,500, to which would be added a 5% tax on other assets, such as stocks, bonds, vacation or rental homes, etc.
Best guess is that for most Santa Barbarians the question becomes what to sell.
Same question for billionaires. For example, a 5% tax on a billion dollars in assets would be $50 million.
Governor Gavin Newsom
“California has the most progressive tax structure in the United States of America,” Governor Newsom said on January 29, 2026, at a Bloomberg News event.
The governor, after not stopping it, said “The impact of a one-time tax does not solve an ongoing structural challenge that has been exacerbated by the impacts of H.R. 1.”
Is the governor indicating that he thinks this may not be just a “one-time” tax?
Governor Newsom continued, “There’s impact as it relates to the flow of capital, the impacts on the market, which are not inconsequential.
”I was burdened by the facts. The fact is, it actually will reduce investments in education. It will reduce investment in teachers and librarians, childcare. It will reduce investments in firefighting and police.”
Newsom said new data from the Legislative Analyst’s Office show the proposed wealth tax would bring a “one-time” windfall, then “over the years, you would see a significant reduction in taxes because taxpayers will move. And that is what I fear at a state level.”
Leaving California
Luxury real estate broker Josh Altman said that “There’s about two hundred to two hundred fifty billionaires in California, more than any other state. However, there are also forty million people in California, twenty-three [million] of whom are eligible to vote. If this hits the ballot, there is no way that billionaires come out on top here, and that’s an issue.” (Fox Business, January 28, 2026).
Altman warned that California’s proposed wealth tax could drive a number of billionaires out of the state and trigger a damaging “trickle-down” effect.
Altman said that seven billionaires he personally knows have already left California for other parts of the U.S., including Las Vegas and Florida.”
The tax being retroactive to January 1, 2026, means that the billionaires could not wait to see if the tax passes before relocating.
For example, Google co-founder Larry Page is paying $173 million for a mansion in Miami. Billionaires frequently take their current and future businesses with them as Elon Musk did when he took Tesla, SpaceX, X (formerly Twitter), The Boring Company, Neuralink and xAI, and their employees with him when he relocated to Texas from California.
It has been reported that of the estimated $2 trillion in assets held cumulatively by billionaires, about $800 billion has already left California meaning that not only will they not be subject to the billionaire tax but that they will also not be paying any future California taxes.
Conclusion
Making the proposal retroactive to January 1, 2026, means that some, perhaps many, billionaires have already taken actions to not be California residents.
Even Governor Newsom projects that the billionaires leaving will “result in a “significant reduction in taxes” collected by California.
California Democrats will need to either reduce the expenses of state government, or increase the taxes on Californians who have not left.
Which do you think it will be?
Is there any doubt that this is just the beginning of increased taxes on the middle class?
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More taxes and fees are coming until all Democrats are voted out or learn to cut government spending. It’s easier to pass more bonds, parcel, and special taxes than for officials to cut spending. Locally the City and County of Santa Barbara could easily cut a fourth of its personnel. Six voter initiatives are available to sign at local shopping centers. 5 of 6 are to INCREASE our taxes. One is for a bond to create housing only for UC employees.
Be careful what you sign. CA Voter Initiatives tend to pass as fewer own properties to carry the tax burden.
Nailed it. How do you tax someone on a unrealized capital gain, who accesses the value of these assets? This sounds like one big law suit. Then to follow will be the wealth tax on those with assets over $100mm and $10mm and then just about everybody left. There must be a better way, how about reduced spending for starters?