Tech billionaires push back against proposed wealth tax in California

+ National Tech billionaires push back against proposed wealth tax in California August 20, 20264:45 AM ET Heard on Morning Edition Bobby Allyn Tech billionaires push back against proposed wealth tax in California Listen &middot; 4:07 4:07 Transcript Toggle more options Download Embed Embed "> <iframe src="https://www.npr.org/player/embed/nx-s1-5935597/nx-s1-9894194" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player"> Transcript Tech billionaires in California are fighting a proposed one-time wealth tax.

+ Sponsor Message Transcript LEILA FADEL, HOST: OK. Let's head back to the California that Harry and Meghan are leaving, where there's a battle over a tax on billionaires. Proposition 40 is a first of its kind of measure. It would collect a one-time 5% tax on the state's wealthiest residents. Billionaires are spending millions against it. NPR'S Bobby Allyn reports.

+ BOBBY ALLYN, BYLINE: The story of the proposed billionaire tax starts with President Trump's One Big Beautiful Bill, which was signed into law last year. Opponents say the law's cuts to healthcare and food assistance could amount to nearly $100 billion in California over the next five years. Dave Regan, president of the SEIU-United Healthcare Workers West, thought, OK, what should the state of California do about that? DAVE REGAN: And so, Proposition 40 was developed specifically to backfill those cuts from the One Big Bill that are scheduled to take effect in the next five years. It is a 5-year solution to that plan. ALLYN: Here's how it works. California's nearly 250 billionaires will pay a 5% tax on their total assets. Regan says 90% of that money will be used for healthcare services, and the other 10% will go towards food assistance and public education. REGAN: We're not even talking about the top 1%. We're talking about the top 0.0001% - the billionaires, 250 individuals in California, $2.4 trillion worth of wealth. And that's an amount of money equivalent to the annual income of all Californians who are not billionaires, including extraordinarily wealthy people. ALLYN: Billionaires in California are not happy. Google co-founder Sergey Brin has poured $102 million into a group known as Building a Better California to defeat the effort, in part by supporting a separate ballot measure that would invalidate the tax. But others are uncomfortable with the tax too, including Governor Gavin Newsom, some labor unions and tax policy experts. They say this one-time tax will lead to billionaires fleeing the state, and that could open a giant hole in California's budget in the years ahead - a short-term fix that has bad long-term consequences, they argue. Here's Adam Michel, who studies tax policy at the libertarian Cato Institute. ADAM MICHEL: A wealth tax of this magnitude will be bad for California and for California taxpayers. We should expect not just targeted billionaires to leave, but anyone that expects to be a billionaire or expects to be the target of aggressive taxes like this in the future to leave. ALLYN: It's a crucial issue since California's Chamber of Commerce estimates 1% of the state's residents pay nearly 50% of all personal income taxes. Everyone agrees that a mass flight of the ultrarich would throw California's budget into a tailspin. But will that actually happen? Regan, who was the architect of the tax, says it deliberately applies to billionaires who resided in California in January of this year, meaning leaving after it passes won't allow them to dodge the tax. Cato's Michel says the tax will discourage future billionaires from ever moving to California. MICHEL: Any billionaire that sticks around after Californians level this one time tax, have to assume that voters will come back to them again with taxes like this in the future. ALLYN: Sergey Brin and other billionaires have recently moved to the Nevada side of Lake Tahoe. Critics of the tax say there will only be more and more of that if voters pass the measure in November. Brin did not return multiple requests for comment, but in a statement to The New York Times he said, quote, "I fled socialism with my family in 1979 and know the devastating oppressive society it created in the Soviet Union. I don't want California to end up in the same place." Union leader Regan says Brin owes his success in part to government-backed research that helped create Google. REGAN: You are now one of the five wealthiest people in the world in the state that made you rich - enormously rich, needs to stabilize its healthcare system. ALLYN: Polls show that Californians are nearly evenly split on the tax. Bobby Allyn, NPR News. (SOUNDBITE OF SONG, "NOW YOU KNOW") WEIRD AL YANKOVIC: (Singing) No fabrications, no exaggerations. It's the gospel truth. Copyright &copy; 2026 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information. Accuracy and availability of NPR transcripts may vary. Transcript text may be revised to correct errors or match updates to audio. Audio on npr.org may be edited after its original broadcast or publication. The authoritative record of NPR’s programming is the audio record. 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