California's Billionaire Tax: A Dangerous Wealth Grab on Innovation

California’s so-called 2026 Billionaire Tax Act is a radical one-time wealth grab dressed up as compassion. Filed late in 2025, the proposal would levy up to a 5 percent tax on the net worth of any resident whose assets exceed $1 billion as of the start of 2026, with complex valuation rules and exclusions that won’t stop determined bureaucrats from going after companies and stock holdings. This is not small change — it is a targeted attack on the creators of jobs and innovation in our state.

 Backers claim the tax would raise roughly $100 billion from about 200 billionaires and dedicate the money largely to health care, food assistance, and education programs, but voters should be skeptical of promises that sound too good to be true. The levy would apply to businesses, securities, art, and intellectual property and is explicitly designed to tax unrealized gains, a slippery slope that essentially treats paper wealth as cash. Whatever the intended purpose, once you set a precedent that the state can seize a slice of private fortunes it invites endless future raids on prosperity.

The political fallout has already begun, and it’s predictable: entrepreneurs and founders are quietly—then not so quietly—preparing to leave. Wealthy Californians are restructuring assets, changing residencies, and warning that an exodus of leadership, philanthropy, and jobs will not be hypothetical; it will be the real consequence of punishing success with confiscatory taxes. If the goal is to preserve hospitals and services, driving away the very people who invest and employ tens of thousands makes no sense.

Public figures on both the left and right are weighing in, and even some Democrats are uneasy about the long-term damage to the Golden State’s economy. Governor Gavin Newsom and other centrist leaders have warned that such a tax could prompt billionaires to relocate and erode the state’s tax base, an outcome that would ultimately hurt ordinary Californians more than the targeted few. Meanwhile, unions and progressive activists are pushing the measure as a solution to federal funding shortfalls, but political expediency doesn’t equal sound fiscal policy.

Peter Thiel, a high-profile tech founder who has shifted much of his life and business footprint out of California, has already started fighting back — donating millions to oppose the initiative and making public that the proposal would saddle him with an enormous bill. Estimates of Thiel’s potential liability vary depending on which valuation you accept, but reports put the potential one-time tax in the billions of dollars, underscoring how sweeping and punitive the measure would be. Whether you admire Thiel or not, there’s a deeper principle at stake: government should not be in the business of penalizing achievement and wealth creation.

The mechanics also hide serious practical problems: valuing private businesses, intellectual property, and other non-liquid assets will invite litigation, tax avoidance schemes, and expensive enforcement battles that taxpayers will ultimately fund. Promoters promise a neat windfall, but state analysts and business groups warn of shrinking revenues if the wealthy decamp, not to mention the legal quagmires that will clog courts for years. This is the kind of reckless, virtue-signaling policy that appeals to urban activists but leaves working families and small businesses holding the bag.

Patriotic Californians who believe in free enterprise and limited government should be alarmed and mobilize now to make their voices heard. Ballot qualification requires hundreds of thousands of signatures, and this fight will be decided at the ballot box if the measure qualifies, so citizens must demand accountability and warn neighbors about the real costs of confiscatory taxation. Don’t let the state weaponize envy against the innovators and investors who make our communities prosperous; stand for policies that grow opportunity rather than punish success.