Source: Fortune.com
Summary
A proposal to temporarily raise taxes on billionaires in California will be put to voters in November, despite opposition from critics, including Governor Gavin Newsom. The Service Employees International Union Healthcare Workers West is backing the measure, which would impose a one-time 5% tax on individuals with a net worth exceeding $1 billion. The goal is to generate $100 billion in revenue to fund the state’s Medicaid system. Opponents argue the tax would push the ultrawealthy to leave the state, taking their income tax contributions with them.
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The numbers tell one story.
The proposal is backed by the Service Employees International Union Healthcare Workers West, but opposed by Governor Gavin Newsom and many traditional allies of the union. The tax would generate tens of billions of dollars in the first few years, but subsequently decline by hundreds of millions of dollars annually. Tech moguls, including Google co-founder Sergey Brin, have donated millions to defeat the measure. California relies on its top 1% of earners for nearly half of its personal income tax revenue. The union offered to scale back its proposal, but the governor’s office rejected it.
The tax debate enters a familiar phase: billionaires vs. the state’s budget.
Author: Evan Null
