The push to put California’s so-called billionaire tax on the November ballot has moved forward, even after voters learned a backdoor clause could reach ordinary homeowners, and researchers warn the plan could cost the state well over 100,000 jobs and billions in wages.
Signatures cleared the threshold to get the measure on the ballot despite growing alarm that the proposal’s language could sweep far beyond the ultra-wealthy. Voters who backed the initiative thinking it hit only billionaires may soon discover a far broader tax bite. That hidden reach changes the stakes for families, small businesses and employers statewide.
Under the proposal, wealth would be taxed on the basis of assets, not just income, which makes houses, small businesses and retirement savings vulnerable to annual levies. Given California’s high property values, many middle-class homeowners could be taxed out of their homes or forced to sell to meet new bills. That’s not theory — it’s a plausible outcome of applying a wealth levy across a market with extreme asset appreciation.
The economic fallout won’t be limited to pocketbooks. Analysts say the tax will distort incentives, push entrepreneurs and investors out of state, and shrink the pool of capital that funds new companies and jobs. Those shifts matter in a state whose industries rely on mobile talent, private investment and headquarters-level jobs.
A fresh analysis quantifies the threat, arguing the initiative would lead to substantial job losses and lower wage totals across California. That study ties departures of high-net-worth individuals to relocations of offices and reduced local spending. The cascading effect, the researchers say, would ripple through tech, services and specialty manufacturing.
A controversial billionaire tax measure in California — which has secured enough signatures to appear on the November ballot — would devastate the state’s economy, a new study published Monday shows.
More than 108,000 jobs could be lost if the tax goes into effect, the analysis concluded, and $28 billion worth of wages would also be lost in California.
“For everyday Californians, these are not abstract numbers. They represent fewer career opportunities in the state’s most dynamic industries and in the businesses that serve them,” the report said.
The study was commissioned by Stop the Squeeze, a committee run by veteran consultants Dan Newman and Brian Brokaw to oppose the tax initiative. The two have ties to Gov. Gavin Newsom (D), who publicly opposes the tax.
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However, the study estimated that at least 40 ultra-wealthy Californians would leave the state as a result, meaning half of the $2 trillion held by the state’s billionaires would be gone. Already, a number of them have announced they’ve left California.
When such individuals leave, there is a loss of jobs with offices relocated, a reduction in consumer consumption and disruption to future jobs that would have been created, the report said. Those factors help contribute to the more than 108,000 jobs lost.
Those estimates should give pause to anyone who cares about the state’s job base and revenue outlook. Hundreds of thousands of Californians depend on industries that thrive because capital stays and grows here. Strip away entrepreneurs, and you shrink opportunity for everyone under the guise of taxing the truly rich.
And the worst-case scenarios aren’t outlandish. If billionaires relocate, their firms, payrolls and supplier networks often go with them, removing entire ecosystems of employment. The math behind the study is blunt: fewer firms, less hiring, and diminished wages across key metro areas.
Policymakers pushing this initiative may be courting a budget shortfall as revenue projections fall short and compliance costs rise. Higher rates on capital typically change behavior, and that behavioral change can wipe out the expected windfall the measure promises. When businesses scale back or headquarter elsewhere, taxable activity evaporates.
Ordinary Californians should also consider the fairness piece: taxing illiquid assets annually forces choices that can devastate households that are asset-rich but cash-poor. That’s a common problem in a state where property values have outpaced incomes for years. The result could be more foreclosures and forced sales, not greater equity.
“This is the predictable result of ignoring a basic economic reality: new taxes and higher rates on productive people don’t automatically deliver higher revenue,” he wrote. “Capital and talent are mobile. When you punish success, it relocates. Middle class, get ready to pay up. The bill for these experiments always lands on those who can’t easily leave.”
Editor’s Note: The 2026 Midterms will determine the fate of President Trump’s America First agenda. Republicans must maintain control of both chambers of Congress.
