Should California Impose a Tax on Billionaires?

Support for KQED Podcasts comes from Star One Credit Union. Give your savings account the love it deserves. When you keep your money with Star One, you keep more of your money. Star One Credit Union in your best interest. From KQED. Welcome to Forum, I'm Meenik Kim. A proposed tax on billionaires in California, which hasn't even qualified for the November ballot, is already triggering strong reaction and spurring action. Here's Silicon Valley billionaire David Sacks, President Trump's AI and crypto-zar on the all-in podcast. It's like the Democrats are doing everything they can to get me to leave the state. They've been boiling the frog. I still haven't jumped out of the pot. But for me, I think the wealth tax. I haven't had to jump out of the pot with this. The New York Times also reports Google co-founder, Sergei Brynn and Larry Page are cutting some of their California ties. In anticipation of the tax. And Governor Newsom has come out strongly against the measure, though Nvidia CEO, Jensen Huang says he's perfectly fine with it. Sponsored by Labor Union, SEIU United Healthcare Workers' West, it seeks a one-time 5% tax on the assets of the state's 200-plus billionaires. To fund healthcare cuts from a public and so-called "big beautiful" bill. And joining me now is SEIU-UHW Chief of Staff, Suzanne Jimenez. Suzanne, welcome. Hi, Nina. Thanks for having me. Thanks for being here. See more about why you feel this tax is needed, Suzanne. No, absolutely. So, you know, this tax measure or this ballot measure actually came to existence due to the massive federal cuts in HR1 that's going to strip $100 million from California healthcare over the next five years, pushing the state towards a complete healthcare collapse that could force hospitals and ERs to close healthcare premiums to skyrocket in times of thousands of jobs to disappear. So, really, the initiative is a solution to dig us out of a hole that we're heading in in the next couple of years. And experts warned that without replacement funding, California could lose up to 145,000 healthcare jobs statewide. So, how much money do you estimate this one-time tax could raise? This tax on Californians worth more than a billion dollars. Yeah, so this modest tax will raise just about 100 billion dollars over the five years. 90% of it will go to healthcare and to secure healthcare, you know, system here in California and 10% of it will go through K through 14 education and food stamps. So, 90%? Yeah, to healthcare and 10% to K-14 education and food. Assistance and billionaires could take five years or so to pay it? Yeah, absolutely. So, as I said, it's a one-time 5% tax that only about 200 billionaires would have to pay. And they could take the option of paying 1% over the next five years if they choose or they could pay the 5% upfront. And this applies to billionaires who live in California as of January 1st, 2026. So, the very first of this year. Correct. Yes. So, then respond to the main pushback against this, which is that it would cause billionaires to leave the state and the tax revenue they generate ultimately costing the state more than this one-time tax could provide. You know, this kind of all of the speculation around billionaires leaving. What we have seen in other states that have passed wealth taxes is that the ultra wealthy don't actually move out of the state that, you know, in the most recent example in Massachusetts, they passed a different tax. It was a millionaire tax. And there was the same kind of fear mongering during the campaign that people were going to leave. Millionaires are leaving the state. And what actually happened is not only did they increase but it increased almost by 50% in terms of millionaires in the state. And so, we just think all of this, you know, distraction around billionaires leaving is not quite what's happening. But in terms of the income tax base, when we look at everyday people, teachers, firefighters, you know, workers like most people that get an income, we get taxed at a higher rate than many of these billionaires do or the ultra wealthy. They don't pay as high as income tax as many of, you know, everyday working folks. Yeah. So, yes, some who are opposed to this have definitely said that billionaires, it would cause billionaires to leave the state. Though the state's legislative analyst office did conclude that that is something to consider, that people who do leave the state would deprive the state of potentially hundreds of millions of dollars in ongoing tax revenue. But let me ask you Suzanne about something else, even if it qualifies for the ballot and passes. There are lawsuits that have been promised by billionaires to stop the measure, including challenges to the fact that it would start retroactively on January 1, 2026 for residents as of January 1, 2026. So, it might never achieve its intended gains. How are you preparing for those legal challenges? Yeah, that's a great question. So, the California billionaire tax has been shaped by the top legal experts that this initiative itself can withstand any legal challenge. It was developed with input from, as I said, top tax experts, economists in the country. So, we're very confident that this is legally sound, and any suggestion otherwise, we believe is a political talking point. And even if somebody, billionaires, whomever, try to challenge in the courts, California residents with more than one billion in worldwide wealth, would still be required to pay the tax until the decision is issued. So, we feel strongly about how it's written. It uses, you know, strong legal precedent here in the state of California, and we think it will be upheld. We're talking with Suzanne Jimenez, Chief of Staff at SCIU, United Health Care Worker's West and sponsor of the California Billionaire Tax Act, the Union. Suzanne, the proposal has gotten some criticism from fellow labor groups saying that it could tank other measures, like an effort to extend California's existing income tax rate on high income earners. What's your response to that? No, we've seen nothing that shows that. To be true, we believe that there is space on, not just on the ballot measure, but in California for different, you know, initiatives to be on the ballot. And specifically for the billionaire tax, we are trying to solve a very immediate crisis that's before us. We are going to see $100 billion cut from the state budget around our healthcare system. There is no immediate solution to fill that hole. And without a solution like the billionaire tax, we are going to see hospitals close. We are going to see, and it's already actually happening. So, Alameda Hospital has just announced that, or actually they announced in December, that 300 workers will be laid off due to cuts directly from HR1. And so as we start seeing the effects of these cuts from HR1, we believe the billionaire taxes, the immediate solution that voters will agree with that we have to pass to ensure that we protect our healthcare system. What would you look at to show whether or not your ballot measure would make it harder to pass other tax-related ballot measures? I mean, I think we have not seen anything that shows that it would hurt other tax measures. So, I think that we've not seen that in any way. So, we believe that there can be both things at the same time. And again, right now, we are looking to solve for a crisis that's heading towards California. And right now, this is the solution that we're proposing. Political report, it's speaking with some union officials who said they felt that the tax would overwhelmingly benefit SEIU, UHW, your members at the expense potentially of other public sector employees. You say what's to that? I mean, you know, the 39 million people in California rely on healthcare. If they're the amounts of cuts that we know are coming, that is going to affect everyone. This does not impact or, you know, it doesn't just directly affect our membership. Yes, we represent healthcare workers, you know, we're not hiding from that fact. But what we're talking about are ERs closing, hospitals closing, folks not having access to Medicaid, seniors and veterans not having access to home care services, nursing homes. I mean, the effects are across the state. And not to mention, 4 million California businesses were now seeing increases in their premiums. So this is really a measure that, you know, when we look at the entire healthcare system actually supports all of California because we all rely on healthcare in one shape or form. Why not put the resources right now that you're putting into this measure into electing candidates who would get a federal wealth tax measure across the finish line, one that billionaires could not avoid by moving or moving their assets out of the state. I mean, I think you could do both those things. Right now, there is no solution in California. And we have to think about what are we going to do in six months in a year when we start seeing the cuts and their real effects here in California. And so that is why we're, you know, are the healthcare workers of SEIUHW have decided to put the funding behind this initiative because we've got to find a solution for California immediately, you know, we would be in support of any kind of federal work that way too. But right now we're looking at how do we find a solution here in California. What do you negotiate with the governor's office to keep this off the ballot? There's been lots of speculations about that. I will say the governor has not come to us or to anyone, you know, an SEIU around any concrete solution to deal with the healthcare crisis that we're, you know, we're heading towards. It is a hundred billion dollar problem. There is no real solution, no viable solution that has been discussed. And at the end of the day, this initiative, we're trying to solve for a real problem that's coming our way here in California. And there's been no real conversations about how do we solve that problem. Yeah, what would it take from the state for you for SEIUHW? I mean, we're going to put this initiative on the ballot. We're going to take it to voters. We have to be able to raise and I will just say the billionaire tax itself is a dollar for dollar solution to the problem that HR1 has created. And so we are looking or the state of the California is looking at 20 billion dollars. And that's really a lower estimate of what cuts could look like for Medicaid, for subs, for, you know, exchange subsidies to all types of other services in healthcare. And there's no viable solution right now. So right now, we are proposing the California billionaire tax. And we want to take it to voters. And we think voters will agree with us. How is Signature gathering going? Where does the effort stand with that? Yeah. Yeah, I'm glad you asked. We just did a huge volunteer training session last week. We're already out collecting signatures. And voters are very excited about this. We are hearing, you know, this tax weekend was MLK weekend. We had many of many healthcare workers out there at different parades and different events. And, you know, folks are lining up to put their signature on the ballot. We've not seen this before. So there's real excitement and momentum voters think this is the right time. So, you know, so far, everything is going great. And we expect that we're going to qualify this with no issue. Suzanne Jimenez, Chief of Staff at SEIU, United Healthcare Workers West. Thanks so much for talking with us. Oh, thank you so much for having us. Thank you. And listeners, I want to know what you think. Would you support a California billionaire's tax if it made it onto the ballot? Why or why not? What do you want to know about this proposed billionaire's tax? You can email for them at kqed.org. Find us on Discord, or Blue Sky Facebook Instagram or Threads at KQED Forum or call us 866-733-6786. Stay with us. Star One Credit Union provides you with the tech tools and terms to control your money and your lifestyle. Simple, seamless, everyday financial services and solutions, online and mobile banking back by the latest technology, great rates on home, auto and solar loans, and real people providing real assistance when you need it. At Star One, they always put you first. Become a member at starone.org or visit any of their Bay Area locations. Star One Credit Union, in your best interest. Welcome back to Forum. I'm Meena Kim. To offset federal budget cuts to California's healthcare system, a healthcare union has put forward a so-called billionaires tax, calling for California's wealthiest residents who lived in the state as of January of this year, to be taxed the equivalent to 5% of their assets. It's already triggering action and reaction, even though it's only in the signature gathering phase. Listeners, what do you think of it? You can tell us by emailing forum at kqed.org, posting on our social channels, or by calling 866-733-6786-866-733-6786. Rick writes, "As a medical and in-home supportive services recipient, and as a fellow Democrat, I would have to say yes on the tax. How else are we expected to fund these services?" Chris writes, "The proposed ballot measure to impose a wealth tax is divisive at a time when we need to build bridges, not erect walls. It also will do nothing to solve the real healthcare issues, which it claims to address as it's pitched as a one-shot measure to save jobs, and not a mechanism to fix Medicaid through income tax increases." We're going to dig into the details right now with Marisa Lagos, politics correspondent, and co-hosts of political breakdown on KQED. Hi, Marisa. Hey, Mina. Ryan Mack is also with us, who covers corporate accountability tech companies, and the people who run them for the New York Times. He's based in LA, and his co-author of character limit how Elon Musk destroyed Twitter, Ryan Glad to have you with us as well. Some Marisa, I'll start with you. It's not often that's a measure that's not even real yet, I guess, meaning it's clear the signature gathering phase and qualified for the ballot, triggering what we're hearing about tech moguls, moving their companies or home bases out of the state. Does it suggest you that this tax does have a good chance of passing? I mean, a hundred percent. I think one of the reasons you're seeing such a strong reaction from the billionaires who would have to pay this tax, and someone like the governor who would love to see more revenues come into the state, is because I think we're in a real moment of backlash against this enormous concentration of wealth we've seen, in recent years and particularly decades. This is a group of folks, a very small group of folks who own a large portion of the world's wealth, and I think what you see is on both sides of the aisle really a lot of sort of populist tendencies in recent years. I think that that is really key to this. And then I think you also have to look at who is pushing it. This is a union that has had a lot of success bringing other ballot measures to the ballot, but not always passing them. I'm thinking about those dialysis ballot measures that we've all had to vote on and that were aimed at increasing staffing and maybe unionizing some of those dialysis centers. So this is a union that has been willing to kind of put their money where their mouth is. And so I think when you add those two things together, that's why you're saying all this concern. Do you know who is supporting the union, the tax on billionaires? I mean, as of now, this seems really to be a C I U U H W. You know, we just heard from Suzanne Jimenez, her boss, Dave Regan is a long time, very powerful player in California politics. I think the open question is like, yeah, do other labor unions get on board? I think one of the challenges there is going to be that you do have this kind of concern. And like, look, I think you putting aside like the kind of question is, do we need to tax billionaires more? I think, you know, as always in public policy, the details matter. And so what we're seeing with this is a lot of concernation on the left about the cuts that are coming down from HR one that huge GOP bill that passed last summer. But then also like, is this the correct response and not just will it cause billionaires to flee will get into to that and whether that's just hyperbole or would even matter given the way that the ballot measure is written. But I also think, you know, this is aimed at staunching those HR one cuts, which is mostly to healthcare. But our entire system is going to be threatened by a lot of the things coming down the pike from DC. And so would, you know, the California Teachers Association, another huge player back this went only 10% of this tax is supposed to go to K through 12 education. Will other unions, you know, the other SEI use that represent state workers who maybe, you know, some of which might benefit from this, but some of which may not, you know, do that. And then I think the other really big question is like, because this is a one time tax, is it really the best way to be doing this? Like, we have an ongoing structural budget, budget problem, cost keep increasing and revenues keep increasing. We do have a very progressive tax system here, although I will say some analyses really do suggest that millionaires bear the brunt of that, not the relatively small share of billionaires. But I think, you know, adding all that together, it really makes an interesting political stew. And I really can't predict how it'll shake out in the coming months if this indeed qualifies. And if UHW is unwilling to cut a deal. Yeah, I mean, you're right. It's going to be interesting to see who ends up lining up behind them, because this is going to be an expensive fight, right? Ryan, I mean, you certainly have a good sense of who's opposed to this and what kind of resources they're starting to put behind an opposition effort. Can you talk about venture capitalists and volunteer chair Peter Teal? Yeah, someone who's always kind of in the the thick of things when it comes to US politics. But Peter Teal is someone who is opposed to this, he has already made moves to cut ties with the state. He, you know, a while ago actually moved to Florida, but he has some businesses here. So he opened an office for his family office deal capital in Miami to kind of establish more ties outside of California, in case the, you know, franchise tax board comes and examines that. But he's also spending, we starting to spend three million dollars supporting a pack to, you know, oppose this tax or this proposed tax. And so I think we'll start to see more of that in coming months. Other figures have started to get involved. People like Ron Conway, the venture capitalist in San Francisco, who has talked about opposing this. And other billionaires are making moves to, you know, also cut ties as well. Yeah, you reported how Sergey Brin, I think you actually co broke that story. Sergey Brin and Larry Page, Google cofounders have already cut some ties with California before the new year. What did they do? So both of them have a variety of LLCs that are registered in California. They started to move those into other states, including Nevada and Florida. There's also been reporting that they have been buying real estate in the Florida area. And that was all before January 1, which is this kind of this date that you had to kind of cut ties with California because the tax is going to be retroactive to that date if it passes in November. So yeah, they are the two kind of big names here that we're talking about collectively worth more than 500 billion dollars. Nearing 600 billion dollars, if we actually want to get into math of it, but yeah, it's enormous. That is enormous. Let me go to, we've got a lot of calls and comments coming in. Let me go to Ken in Piedmont when you're sent us pulled over for us. I can, you're on. Hi, thanks for taking my call. My question is, I did some calculations very back of the envelope with some of the amounts that a number of these billionaires owned or their assets. And I just wonder how much 5% would really change their quality of life. You know, all right, 600 billion dollars, the two founders of Google, how much is 5% of that going to change their ability to do business? Or, you know, are they going to have to give up one of their jets? There are people in the billionaire class like Lorraine Powell Jobs, who is a philanthropist, and she gives away more money than these people are worrying about using, so are losing. So I just wonder what real impact these people that are raising these alarms are going to have on them. Ken, that's a great, Ken, thanks for that. Yeah, I mean, I mean, what's your sense, Ryan, of why these billionaires are so opposed to giving 5% of the value of their assets one time to the state where they made their billions? Yeah, speaking as a non-billionaire, I don't can't relate to losing a private jet or a yacht, but I don't think they would, right, right? And I mean, given how fast their wealth grows every single day. Well, the irony of this is, as you know, after this was announced, Google hit a record high market cap the other day. So, you know, their wealth is only growing larger, but I actually have some of the numbers in front of me for the collar. So we did the math at one point, Larry Page, was recently worth about $258 billion, you know, that fluctuates with Google stock price. Most of his, most of his assets are essentially Google shares as the founder there, co-founder there. So if 5% of that would be roughly a $12 billion hit in tax that he'd have to pay over five years, you know, I don't think the quality of his life necessarily would change by losing that amount of money. But what he would argue is that he's actually not liquid on that money. So he doesn't actually have the $12 billion in cash to pay that tax. He would actually have to sell off his shares in Google, you know, which are quite valuable to give him a lot of voting power to give him control over his company. And so that's what a lot of these billionaires are essentially complaining about. That's a perspective is that they have, this is David Sachs called it an asset seizure this morning on CNBC. But, you know, they have to get rid of these assets. They gave up control of their companies. And that's why some of them are quite unhappy with this. I've also heard the argument raised that this is not going to be a one-time thing. That there's a lot of doubt. Is that real or is that a big show of opposition to sort of tank any future discussion maybe of the federal wealth tax in the future? I think it's a possibility, but I also think it's a bit of fear mongering. You know, it's something that David Sachs has also talked about this morning in his interview on CNBC. But he was saying, you know, this, you know, they won't just come for for us. They'll come for you. You know, this won't just be a one-time thing if they if majority can do this at any given time, you know, they'll do it again and they'll do it again. And, you know, it's hypothetical, but you know, it's a nice talking point if you're trying to rally folks against this cause, you know, especially folks that aren't necessarily billionaires that you're trying to get to your side to build a majority here against this. I mean, anything could be put on the ballot again. But to be clear, this measure is a one-time tax. It would not, there's nothing in it that would allow like the legislature to extend that. Voters would have to weigh in again if there was, and, you know, anyone could write anything next year and try to qualify it. We're talking with Marisa Lagos, politics correspondent and co-hosted political breakdown at KQED and Ryan Mack of the New York Times who covers corporate accountability across the global technology industry. He's based in LA. And we're talking with you, our listeners about a proposed ballot measure that would impose a one-time five percent tax on the state's billionaires upwards of 200 or so live here. And you are listeners are weighing in about whether you support it or would support it if it made the ballot because it's in the signature gathering phase and what you want to know about this proposed billionaires tax. Let me go to Ravi and Fremont. Hi, Ravi. You're on. I would vote no on such a measure and here's the reason. The measure, you know, fundamentally is a very, very lazy move by politicians who absolutely have lost all appetite to solve the problems that we face as a country, fundamentally. So, for instance, why is the cost of healthcare delivery so high? Why is there certain billionaires in the capital gains world are able to escape taxes, what other loopholes? All of those things take a take into the side and it's almost like a drug, like a fentanyl drug. You take and you just put this five percent there and you declare victory. And that's the reason why I'm now an independent after 20 years of being a registered Democrat. There's just nothing left in them to fight and change the underlying causes but you just keep drawing. Well, Ravi, thanks for sharing your perspective. Recent, let's talk about where prominent Democrats on this California Democrats in particular. Yeah, yeah, go ahead. I just keep occurring to me. Like if you look at the amount of money that billionaires have put into elections in recent years and the amount that they stand to potentially put into this one, it does seem to me that this is about more than just this tax or having to sell some assets, right? I think that this is kind of being seen and maybe Ryan would disagree but it's a line in the sand for a class of folks who have not been taxed on their wealth the same way that's be true that most people are in their assets because most of us just type of property in a car and if we're lucky. But yeah, and I think that's also why the fault lines among Democrats are so fascinating because so you have the governor lining up against it. A lot of candidates in the governor's race who have taken a position have also opposed it. Even Tom Steyer, we haven't seen back it, who's a billionaire himself and who has really made this campaign and others about sort of tax me. Like I want to see this. You know, there, someone like him even is saying, look, the doubles and the details. I don't know if this is the correct way to do it. You have Katie Porter who's, you know, this populist consumer advocate who's opposing it. And I do think that part of it speaks to the kind of house of cards, if you will, or delicacy of our existing tax structure. We do have a progressive tax structure in California. This is something the governor's really been leaning in on. I think, you know, some analyses show that millionaires maybe pay more of a share of that than billionaires when you look at, you know, by wealth. But it is true that people, you know, a lot of our money, like half of it on the personal income tax side comes from the wealthiest Californians. And so part of what someone like Newsom is concerned about is that if you have, you know, a world of only only a couple hundred billionaires and a dozen of them leave the state, does that actually have deep impacts on our long term fiscal health? Because these are the people that year after year are funding the budget. You know, this is also making a bet that things will improve in five years, right? That we will have maybe a different person in the White House or a different Congress that will reverse some of these HR1 cuts because this is a one-time tax that is not going to sort of, you know, provide ongoing funding for the state. And so I think, and then I just have to underscore again, I'm actually getting some texts on there. I can't talk about the public there off the record, but I do think that Dave Regan at UHW has angered a lot of people in the Democratic Party and the labor movement in the governor's office and that he himself has sort of become a lightning rod for this and that there's a lot of mistrust about the way it's written. Would, you know, would that 10% actually flow to K to 12 schools? And so I feel there's like a stew here that is not as simple as like New Sims against taxing billionaires. It is really about all of these things I just laid out. And is that what you think is also being reflected in the fact that, like, say, the gubernatorial candidates are struggling to kind of say how they feel about this in part because they know that major unions, right, are they're not sure where they all stand on this. Or whether they'll be unified on this. And these are people whose endorsements they want. And they need because this is such a crowded governor's field, but also because they don't because they know where the public stands. And without understanding the details of a budget, I think a majority of Californians as we started with need kind of reflexively are like, yeah, we should tax billionaires more. I mean, 10 years ago, you know, when I first started here, we weren't even talking about billionaires because there weren't that many of them. Like, I mean, it is remarkable if you think about the, and I do think that this gets back to like, what is really at play here with this opposition from these billionaires because their wealth has grown so dramatically in such a, you know, short time compared to what the rest of us have experienced. That, you know, it does seem like this is part of a large or kind of national fight about tax policy. And, you know, I think it's also worth noting, regardless of where the use for the details of this plan that, you know, the biggest winners of HR one, which is what, you know, the cuts that this is trying to staunch were billionaires. They got the biggest tax cuts in that. Well, let's hear where the California public is on this. This isn't a right hard yes on this billionaire tax. The billionaires in California won't even feel it. Ideally, there would be a world tax or the threat of moving somewhere else becomes irrelevant. Let me go to Susan in Loma Linda. Susan, how do you feel? I've lived in Southern California for 20 years now and run a small business that employs 11 people. We generate a couple million in revenue and, you know, I'm not a billionaire and I never will be. I won't kid myself. But especially this time of year when we're just like sporking over all this money for taxes, my husband and I were talking recently. We're just about fed up with this out of control spending that our government does here in the state. Only for things to actually get worse due to bad policy. And I feel like this tax measure it would be like the final straw for us and our family like we need fiscal responsibility not higher taxes. Final straw meaning we love our community. Yeah, sorry Susan to interrupt you but final straw meaning you would leave the state. You would move. We yeah, we've already been considering that we pay such high income tax. It almost seems irresponsible to say, but it wouldn't just be chasing out the billionaires. I really I really feel like people like us who you know our middle class it just shows this lack of commitment to fiscal responsibility on the states part. Well, Susan, thanks so much for sharing where you're at with this. Listeners, tell us where you're at with this proposed ballot measure that would impose a one-time 5% tax on the states, billionaires. More after the break, I mean a Kim. I mean it Kim. Listeners, would you support a tax on billionaires in California? What do you want to know about the proposed billionaires tax that is calling for California's wealthiest residents who lived in the status of January first to be taxed the equivalent of 5% of their assets. It's triggering action and reaction and we're talking about it with Marisa Lago's politics correspondent and co-host of Political Breakdown at KQED and with Ryan Mac of the New York Times, a reporter covering corporate accountability across the global technology industry. He covers the big companies and the people who run them and is giving us insight into some of the opposition that some billionaires are expressing. And listeners, you are sharing the way you feel about this and your questions about this. This is Mr. Asp. Please discuss the practical aspects of actually assessing an individual's wealth to be taxed if this measure passes. Jerry similarly writes, "How is billionaire status determined?" Ryan, I'll go to you on that because there are a lot of provisions in this bill that the state would have to figure out to know how to assess this tax. Talk about some of the thorniest ones. Yeah, I mean that's a great question of how you assess someone is a billionaire. It's actually a kind of very fuzzy. I used to do this for Forbes in my previous job of working on those billionaires lists and trying to put together net worth calculations. And it's not easy for some folks, let's take Larry Page, for example, most of that worth net worth is coming from his Google shares. But for someone like Peter Teal, who has private investments, real estate, potentially they have yachts or planes or art, I mean that gets really, really dicey trying to figure out all that stuff into putting together some kind of net worth valuation. And so I'm not exactly clear as to how the proposal lays out how they'll calculate that. I'm wondering if they're going to rely on like a Forbes list or a Bloomberg billionaires list. But I think that is one of the things that I'm also wondering as well is how they're going to actually calculate someone's net worth because it's not like you disclose that necessarily on a tax form. And how easy is it to prove you're not a resident that you're not subject to the tax, right? That also feels like that. They wrote it so it's retroact, like if you were a resident. So if anyone moves here now, it wouldn't apply to them and all of that. I mean this will certainly be taken to court. I think is the answer to a lot of these questions. And that raises also questions about the ability of it to deliver the money that it's promising, I think. Right. But don't go ahead, Ryan. Sorry. I would say residency is also very fuzzy as well. I mean, most people think, you know, it's just my home address. And it's actually not that because when the franchise tax board takes into account where you live to tax you, they take into account where the registration address, social connections, business where your businesses are located. There's all these factors that can come into play when it comes to assessing quote-unquote residency. And that's really important here because these billionaires, you know, they have real estate all around the world. You know, they're not necessarily in California for a side amount of time, like most people. And so that is also kind of going to be a weird thing for them to kind of have to sift through. Yeah. Ryan, what do you see as some of the biggest legal challenges that will be made against this tax if it passes? Oh, man, I think there's going to be so many. I think there's going to be a lot of steps to get there. But we talked about earlier about this argument of asset seizure. Can the government force, you know, these billionaires to sell off assets just to satisfy this tax? And it seems like the kind of argument against it from people like David Sacks who himself has started to cut ties with the state of California is that this is illegal. You know, the government can't force you to do this and that they're going to fight this when it comes to that point. Yeah. I mean, is it an asset for sure that they're not taking the stocks? They're just saying you owe an amount of money. Like you could argue that some people can't afford their homes to pay the property taxes on and they go into foreclosure or it sees by a city, right? I think there's, I mean, again, I'm not a lawyer. This is going to be litigated. But I do think this brings up a lot of things. I also think, you know, again, back to this, David Sacks has had a lot of problems with California and California policies for a very long time. So I do think that there is some difference between the noises we're hearing from someone like him who has been enormously critical of this governor, this state. It's a lecturer at the way it does business. And maybe, you know, the Google co-founders who have not been as necessarily as far out there on the politics. I mean, let's be clear, David Sacks is a White House official. He is very much a Trump ally. And I think, you know, you can see that both can be true. He can hate the idea and the reality of this policy and also be sort of taking it as an opportunity to ding a state that he has long been trying to force, I think, to take, you know, on some more of his policy. Yeah. The Reed Hoffman of LinkedIn, you know, said, quote, poorly designed taxes and incentivize avoidance, capital flight and distortions that ultimately raise less revenue. And Ryan, what's Jensen Huang's story of Nvidia? Why is he perfectly fine with this as he told Bloomberg? Very, very surprising in my view. But he said he's he's all good with it. He is, he's, you know, he just gave this interview. I don't think he was expecting the question necessarily. He hasn't said much after the fact. But he said, you know, Nvidia was built in California. They took advantage, you know, they took advantage of California's talent and, you know, the states, all these great conditions in the state and he's happy to pay that tax as a result. You know, he built his business in California and he's he's been rewarded for it. So he wants to, I guess, give back. And that's kind of the, he's given, you know, that one interview on that. But so far, he's been one of the few billionaires to come out in favor of this. Yeah, let me go to Buck in San Francisco. Next time, Buck, you're on someone. This is ridiculous. These billionaires should pay their fair share. Why one time? It should be a permanent tax. We should catch up with the rest of the industrialized world and have these suckers begin to pay with even remotely their fair share. One other thing, by the way, is Marisol Augustus is the best person on radio. Love you guys. Thank you very much. Well, Tom writes, don't pretend that a well tax will stop at the billionaire level. The state sales tax began at 2.5% in 1933 and now is over 10% in some counties. A clear no vote is warranted. Let me go to Kevin and mountainview. Hi, Kevin, you're on. Hi there. Thanks for taking my call. So to me, while I hear the arguments that, you know, this doesn't solve the root issues, and it might drive billionaires away, I think it's undeniable that the trend in recent years is for the desire for billionaires to pay their fair share and especially led by Democrats and regular Californians. And I think billionaires know this. So even if this particular measure doesn't pass, the writing is on the wall that, you know, in our state, even if it's not across the country just yet, we're going to do what we can to get you to pay your fair share. So even if this is just a bandaid, even if it prompts some billionaires to leave, I think it's still a net benefit to California as a whole. And it's just the first step in addressing the problem of inequality in California. And so that's why I think I would support this measure. Where's the how genuine do you think new sums concerns are about billionaires leaving the state and taking their future revenue, tax revenue with them? I think so genuine. I mean, I think nobody can kind of like predict the future. And I mean, the truth is this is not going to be new sums mess. He'll be out of office by the time this all comes to pass. And I don't know that it actually hurts him that he's able to take a stand on something like this if he's wants to have, wants to be president as well to understand. Yeah. Even though as you say, the broader mood of the electorate is. Yeah, I do think it's like a hard and interesting one because, you know, he and other Democrats, I think are going to be asked by the base of their party in 2028 to support higher taxes on the wealthiest. And I think billionaires are a very obvious sort of target of that. So is there a world in which someone like Newsom, and I don't think he's alone in this as we talked about with the other, you know, candidates for governor lining up in this way, like trusting that there's going to be a hearing of the nuance here that it's not just going to be reflexively seen by the left as him sort of protecting his billionaire buddies, you know, maybe it does kind of get him some folks in the center on the center right be more willing to give him a look. But at the end of the day, I mean, this is the man that has overseen California for eight years and has been an elected office here for 20. We do have a very progressive high tax system. And so it's not like, it's not like this is going to suddenly make a bunch of Texas Republicans love Gavin Newsom. I think it's, I think he's in a very fascinating position. I mean, you said billionaire buddies, Mary said, but, you know, Larry Page is someone he's very, very close with. He was at his wedding. And this is someone that's now cutting ties. And so it's really litmus tests for him. And, you know, he's come out against this. But yeah, I just think he's in such an interesting position relative to most politicians here. And he like to your point, right? And I think also has like really tried to navigate a fine line around just the tech industry and regulation of them in general. And we've seen in some cases, he's split with them and in others, he hasn't, you know, I think what we saw around AI, it was really fascinating last year. So this is like an ongoing kind of dance for Newsom. And I think one we're going to get some clarity on in the coming year. Well, Carol writes, in my opinion, this is just a waste of time. Those billionaires would rather spend that 5% and more on legal fees to fight this tax and just pay it and help the people of California. They'll band together and with their wealth and access to top tier law firms, they'll never actually pay it. Steve writes, this is such a ridiculous proposal, meaning the billionaire's tax. The question is not whether the tax will change the quality of life of the billionaires. The question is whether they will stay if the tax is passed. People have freedom to react to laws and they will likely act in their interest. California is already overly dependent on the wealthy for the tax base. And if they leave, this will further erode their tax base. Catherine writes, as a person who has become unemployed and disabled by serious chronic illness, I am in favor of the measure. Groups have been trying for many years to tax the super rich in the state, raising money to offset the massive federal cuts to healthcare seems like a good opportunity to finally do it. And when it happens and the sky doesn't fall, maybe there will be more opportunities to tax the super rich to begin to equalize wealth inequality. That just makes me think of something I've been kind of pondering. And I don't know if this sort of matters, but I do think you just have such a fascinating situation with these folks like making these threats and whether or not they can like carry through with them. And if, you know, the reason that they chose to build these businesses in California are sort of immutable things that have not changed or if we are in a situation where we could really lose our kind of position as a leader in the tech industry and the AI world, right? I mean, we constantly hear these like threats that we want to leave. We want to leave and we've seen with, you know, industries like Hollywood that there have been successful attempts by other states to really woo those folks. But I do think, you know, one of the reasons we have such a strong industry here is our universities, you know, are sort of history in this. And it is just sort of a fascinating question when, you know, folks did build their wealth here for a reason. I guess, I think specifically, specifically with tech as well. I mean, we've heard people talk about Miami being the new place to go or Austin. And, you know, maybe some people left, but with this AI boom, a lot of people have come back to the Bay Area specifically, difference is good to build their companies. You know, there's the talent here, just the energy. And this is, you know, the Bay Area has once again become the center of industry for, for, you know, these up and coming AI companies. So, I mean, the argument could be that, you know, maybe some of these billionaires leave, but other ones, you know, come in and take their place. They've become that the new tax base because their companies are doing so on in California. And it just could be the cycle. But I mean, I think we've seen this argument of going to Miami or Austin or wherever, you know, multiple times and it really hasn't come to fruition. Well, for Roger on Blue Sky, Roger writes billionaires threatening to leave California is a big selling point for the tax for Roger. Let me remind listeners, you are listening to Forum. I'm Mina Kim. This does get at just the larger tension that Marisa talked about Ryan with regard to just where the electorate is when it comes to the incredible income inequality that they feel like their experience, especially if they're, you know, on the lower end of this, can you just for context quickly step back for us and give us a sense of data on just how extreme the wealth disparity has gotten in recent years? I'll do that with one person. And that person is Elon Musk, who I cover quite a bit, you know, a couple years ago he left after not agreeing with California's COVID policies, but he's also facing a pretty large tax bill from the exercising of some options. His net worth since he has left California has tripled. He's now approaching a net worth of about $800 billion. He will likely become the world's first trillionaire, which is just mind-boggling to some, I mean, I covered these billionaires for more than a decade now. How's your wealth, man? I'll talk to my accountant, but I don't think it's anywhere close, but I'm not threatened by this tax at all. I'll just say that. But yeah, just to see that amount of growth in just three or four years is insane. You know, it's hard to wrap your head around that. I mean, yeah, the UC Berkeley professors who helped craft this tax say that 20%, okay, the wealth of the top is 0.2%, amounts to 20% of GDP and 2025. It was 2% in 82. And they're saying that it was essentially about a seven and a half percent growth per year. I mean, politically mean a two. There's this interesting thing that I've been kind of pondering. And it's not unique to this tax. It's more generally a question for like blue cities and states and counties in this moment of these deep budget cuts. And let's be clear, not just the HR1 cuts, but also all the ways that this administration has tried to use the purse drinks to punish democratic cities, which is, does it make sense then for these local governments to backfill those cuts? I mean, obviously like on a human level, you have all these elected officials that don't want folks to feel the pain of these cuts. But you could make the political argument that by staunching it, you're kind of almost covering up what are the effects of the Republican led house and Senate and White House policies. And so like in Santa Clara, they passed something to backfill a lot of these hospital cuts. You know, this would, but that's a lot of potential pain to make point. And I'm not saying that that's the right answer. I just think it is an interesting question of like how should Democrats politically respond to this when it is something where they're they're kind of getting hit by both ends, right? Like either you have these awful cuts or you have these really sort of potentially damaging political debates. Well, this is no right. What if we gave billionaires an option to fund a social issue or a system in place of the tax? How much of this? I asked Susanne this question about a solution, trying to come up with a solution that would avoid putting this on the ballot at all. And some people have suggested that this is a maneuver to get to a solution. But so, but what do you think about that? How genuine is this effort by UHW or is this really just a because we certainly have a history of people doing threatening ballot measures and using direct democracy to be able to push people into their camp? Yeah. And this is something that changed a few years ago when we changed our ballot measure system to allow for sort of later withdrawals of measures and changes to measures. I think that I think that's the hope of the vast majority of the power structure in Sacramento. I think the X factor here is Dave Regan and SCIU, UHW and whether they want a deal. But I do think that when you look at the amount of sort of powerful players who have concerns and I'm not just talking about labor, I'm talking about businesses, the business community itself, you know, Cal Chamber, all of these folks, like I like to me, it seems like crazy that there wouldn't at least be attempt for some sort of deal. You know, I think does that mean that you're going to make David Sacks happy, like maybe not, but maybe there's a world there. What if this effort by UHW there are some concerns that if it doesn't go well in California, it really tanks any future effort for a federal wealth tax as well. How important is how this plays out here to those prospects? You think, Marisa. I mean, I kind of think those are two different conversations and that legally and politically, there were so far from something like that happening in DC right now. And I think that, you know, because this is mostly, you know, so controversial, not because of the idea of it, because of the details of it, maybe it's not as connected, but who knows politics is crazy, I mean, as you're notice. We're talking with Marisa Logos, who knows that very well as politics corresponded and co-host a political breakdown at KQED and Ryan Mack, who covers the tech industry, the tech companies, and the people who run them for the New York Times. Ryan, thanks so much for being with us. Thank you so much. Marisa, I'm really glad to have you with us, too, as always, and of course, our listeners for sharing how they feel, what they think. Caroline Smith produced this segment. I'm Nina Kim. This is warm. Funds for the production of Forum are provided by the Generosity Foundation and the members of KQED.