Why do we need a California Billionaire Tax Act? The simple answer is to replace the money Trump took away from our healthcare systems. However, did you know that there are roughly 214 billionaires in California? Did you also know that they hold a combined wealth estimated to be $2.2 TRILLION? It can be hard to focus on a number that big. We can break that down to be more digestible. According to the US Census Bureau, there are approximately 650,523 housing units in Alameda County. Pretend each of those housing units costs $1 million. You could buy each one and still have more than half left over.
Another way to think about it is in terms of how much you could get if $2.2 trillion were divided among California’s population. As of writing this, the estimated population of California is 39.4 million. Divide $2.2 trillion amongst every single person who lives in California, and they would each get $55,800! Sounds like the state should be taking in a lot via taxes on those billionaires; it doesn’t. That’s why Eden Area proudly endorses the California Billionaire Tax Act.
How Billionaires Avoid Taxes
Billionaires don’t make money the same way you or I make money. Instead, their money goes into assets, which can’t be taxed but can be used to leverage borrowing. They call it “Buy, Borrow, Die.” It works like this: invest and get paid in assets that grow money like stocks, land, art, etc., then, instead of selling those assets, they borrow against them for everyday spending. Those assets are high-value, so the loans are very low-interest and not taxable. When they die, they pass those assets off to their heirs, and this is how they keep the wealth from all of us. The Billionaire Tax Act gives us a break from that bleeding, though it is important to note that it doesn’t stop this from happening.
Here’s how it works. The Tax Act is a bill that will impose a one-time 5% tax on worldwide assets, raising an estimated $100 billion to go towards healthcare, education, and food. Roughly 90% of that will go toward healthcare in the state, and the remaining 10% will go toward education and food for children and families. Sounds like a good deal, right? Well, some democrats are saying no.
Who Wrote the California Billionaire Tax Act
The bill was produced by Brian Galle (UC Berkeley), David Gamage (University of Missouri), Emmanuel Saez (UC Berkeley), and Darien Shanske (UC Davis), and supported by SEIU-UHW, Teamsters California, DSA, and now Eden Area Indivisible (more on that in a bit). So, why are some Democrats and Democratic candidates against this act? Funding. There is plenty of support for the bill via word of mouth, but few want to commit out of fear. Billionaires are loving that fear; in fact, many of them are paying for that fear to grow. The biggest argument against the act is that it will push billionaires to leave the state, taking with them their jobs and their taxes(?) Make that one make sense.
You may have even heard that argument from our very own Gavin Newsom. Let’s run down the list of California billionaires who have donated to Gavin Newsom’s campaigns: Eric Schmidt of Google, Tony Xu of DoorDash, Patrick Collison of Stripe, Joe Gebbia of Airbnb, Michael Bloomberg, Gary Lauder, and Reed Hastings of Netflix. Those last four also donated millions to fight against Zoran Mamdani’s campaign in New York after he announced he would go after the rich via a tax. It is clear to see why Newsom would be against this Act. The same could be said about any other politician who doesn’t support this Act, though we are dangerously close to speculation here. Educated speculation.
Will The Billionaire Tax in California Be Enough?
Another argument from people against this Act is that it is a one-time deal, and that isn’t enough. Eden Area Indivisible believes any money going toward healthcare, education, and food is a good thing. We could take the momentum from the results and use that to push a long-term solution. Obviously, billionaires have made it difficult to tax their wealth, so we need to accept what we can get when we can get it. Would this be enough? No, however, it is a start. That is clear from what happened in Massachusetts. In 2022, Massachusetts voters passed a ballot initiative called the “Fair Share Amendment.” Anyone who made over a million a year would pay 4% more in state income tax.
The passage of the initiative made it possible for every student at every public school to receive free breakfast and free lunch every school day. Those free meals lighten the load for families at home, buying groceries for growing kids. It also allowed them to improve roads and public transportation. Those opposed to the Fair Share Amendment also said millionaires would leave the state. However, the number of millionaires in Massachusetts increased by nearly 40% in the two years after the ballot measure passed. And that wasn’t a one-time tax.
Eden Area Indivisible Endorses the California Billionaire Tax Act
When was the last time you told someone you lived in California and then had to defend it by saying, “Yea, it’s expensive out here, but I love it so, what are you going to do?” Do you think billionaires stay here for the tax breaks? If so, is that a billionaire we want in the state? One that doesn’t contribute to the betterment of our state and its residents the same way YOUR tax dollars do? This is why Eden Area Indivisible officially endorses the California Billionaire Tax Act.
We believe that the California Tax Act is just the beginning, and a train we want to be on. We endorse the one-time 5% tax on the billionaire’s worldwide assets, which would produce roughly $100 billion to help fund healthcare, education, and food. Of course, we are a small group in the grand scheme of things, so what does our endorsement look like? Well, that’s the easy part. Endorsement means we will help canvass in favor of this Act.
We started this process with Doug Jones, who spoke at our No Kings 3 rally in Hayward back on March 28th. You can sign up today to become a volunteer with SEIU-UHW to collect signatures for this Act. You can do that right here. We also encourage you to read the proposal, yes, it’s 34 pages, but the first few are just titles. Knowing what the Act is asking can better prepare you to inform others. And most importantly, ask your candidates whether they plan to support the Act, and, if not, why. It is important that we vote for candidates whose ideals align with ours, not the billionaires.