Why Even Some Democrats Hate California’s Billionaire Tax Proposal
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What is the California billionaire tax proposal about?
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From The New York Times, I'm Nathalie Kitro-Eff. This is The Daily.
Starting right here in California, these billionaires are going to learn that we are still living in a democratic society where the people have some power.
A landmark proposal for a one-time tax on billionaires in California reached a milestone this week. it got enough signatures to put the measure to a vote. Those who have prospered from here in California can afford to invest a little more in keeping California running. Proponents say it's necessary to right the wrongs of an unequal system.
It's like the Democrats are doing everything they can to get me to leave the state. I don't want to.
Opponents say it's going to drive rich taxpayers out of the state.
Just an idiotic concept that is nothing more than political positioning.
But it's not just Republicans and the ultra-wealthy who are against it. It's also a surprising group of Democrats. Today, my colleague Laurel Rosenhall lays out how California arrived at this moment and what it might mean for the fight over inequality nationwide.
It's Wednesday, April 29th.
Laurel, welcome back to the show. It's great to have you here.
Great to be here. Thank you.
So we have you here because we got word this week that a historic tax on billionaires appears to have gotten enough signatures to be put to voters in California in November. So just tell us why that matters at a fundamental level.
Well, this is coming at a moment when there is a lot of anxiety about economic inequality. You know, a lot of people are feeling squeezed about affordability. In California, the electorate is very anti-Trump and feeling somewhat angry about that. some of the cuts that he's done and the ways that he seems to be favoring billionaires. And so people are feeling emotional about that. And this tax has ignited a big pushback from many billionaires who are spending tens of millions of dollars to fight it. And the scope of this tax and the structure of this tax is very unusual. And that's part of the reason it's just generating such a firestorm.
Okay, let's start there with the unusual structure of it. Just explain what the measure would do.
Why do proponents believe the tax is necessary?
So this would place a 5% tax on the net worth of any billionaires who are California residents as of January 1st of this year. The money would go into a special fund at the state level and and would have to be spent on healthcare services. It's unusual to tax the assets of a person as opposed to their income. So their assets would be their stocks, the jewelry they own, the cars in their garage, the paintings. Anything that contributes to their wealth. Notably, it does not include residential property. So that's kind of an interesting exemption. And then it's also unusual on the revenue side to create a special fund where the money would go and that it could only be used for this one purpose. So unlike most of the tax dollars that the state collects, which go into what's called the general fund, and then the elected leaders of the state government decide how to spend it, this is requiring that 90% of it be spent specifically on health care.
What does that actually mean? Like, does that go to the money that people are spending on their health care?
The concept is that the supporters of this tax want to make up for the massive amount of funding that has been cut by the federal government through what Republicans called their big, beautiful bill. The cuts that were in that bill that Trump signed last year were related to Medicaid and Obamacare subsidies. And those health insurance programs pumped a huge amount of money into the health care system writ large.
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Chapters
6 chapters
1
What is the California billionaire tax proposal about?
0:02–3:17
2
Why do proponents believe the tax is necessary?
3:17–7:48
3
What are the main arguments against the billionaire tax?
7:48–12:06
4
How has public support for the tax manifested in California?
12:06–19:41
5
What is the unusual structure of the proposed tax?
19:41–27:58
6
How are billionaires responding to the proposed tax?
27:58–28:27
Speakers
6 identifiedMore from The Daily
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