12/11/2025
The California wealth tax initiative would jeopardize the state's long-term tax base by encouraging high-earners to leave California, the nonpartisan Legislative Analyst's Office reports, and this "would mean less money for the state’s general budget that supports education, health care, prisons, and other services."
"California billionaires, like all those earning money in the state, currently pay state taxes on their annual income," the report states. "How billionaires respond to a new wealth tax could indirectly reduce their income tax payments. For example, it is likely that some billionaires decide to leave California. The income taxes they currently pay to the state would go away with their departure. The reduction in state revenues from these kinds of responses could be hundreds of millions of dollars or more per year."
The reduction in long-term revenue likely would lead to proposals for broad-based tax increases on all remaining California residents.
This measure would create a one-time tax on California billionaires equal to 5 percent of their net worth (A.G. File No. 25-0024, Amendment #1).
