California's Proposition 40 Threatens 5% Billionaire Tax as Critics Warn of Business Exodus
Updated
Updated · Fox Business · Sep 18
California's Proposition 40 Threatens 5% Billionaire Tax as Critics Warn of Business Exodus
3 articles · Updated · Fox Business · Sep 18
Summary
Eric Schiffer said California could face a "giant sucking sound" of entrepreneurs leaving if voters approve Proposition 40, arguing the measure would push wealthy founders and investors to relocate.
Proposition 40 would impose a one-time 5% tax on the net worth of billionaires who were California residents on Jan. 1, 2026; the bill would come due in 2027 and could be paid over five years.
Schiffer said the fallout would extend beyond billionaires, with fewer jobs, less investment and weaker tax revenue if business leaders move out; he added he would consider leaving if similar taxes reached people worth a few hundred million dollars.
California's Legislative Analyst's Office also said some billionaires may leave, estimating the resulting behavioral shifts could cut income-tax revenue by less than $1 billion a year even as the tax raises tens of billions over several years.
The Nov. 3 ballot measure has backing from the California Democratic Party, while Gov. Gavin Newsom and other opponents argue it could further strain the state's economy.