Governor Newsom Rejects California Billionaire Wealth Tax as Billionaires Pump Funding
Governor Gavin Newsom rejected Proposition 40, a proposed one-time 5% wealth tax on California billionaires, saying it would hurt the state’s economy and urging a federal solution, KQED reported. The opposition is being funded by a coalition of Silicon Valley billionaires who have raised more than $340 million and are spending over $1 million a day to defeat the measure, according to The Guardian. Proposition 40, which would have levied the tax on roughly 200 of the state’s wealthiest residents to raise about $100 billion for health-care, has been criticized for potentially driving wealth out of California, CBS News noted.
An NBER paper cited by Fortune estimated that while the tax could generate $30 billion, the resulting out-migration might cost the state roughly $39 billion. The Los Angeles Times reported that opponents have collected about $316 million compared with $34 million raised by supporters, creating a $351 million spending gap.
