Why Even Some Democrats Hate California’s Billionaire Tax Proposal

**SPEAKER_1** (0:00)
This podcast is supported by Bayer. Science is a rigorous process that requires questions, testing, transparency, and results that can be proven again and again. It's the approach that mapped the human genome, advancing therapies for chronic diseases. It transformed farming to help feed billions of people. It produces countless innovations that improve lives worldwide. This approach is integral to every breakthrough Bayer brings forward. Innovations that save lives and feed the world. Because the future depends on it. Learn more at sciencedelivers.com.

**Natalie Kitroeff** (0:36)
From The New York Times, I'm Natalie Kitroeff. This is The Daily.

**SPEAKER_4** (0:45)
Starting right here in California, these billionaires are gonna learn that we are still living in a democratic society where the people have some power.

**Natalie Kitroeff** (0:58)
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.

**SPEAKER_5** (1:10)
Those who have prospered from here in California can afford to invest a little more in keeping California running.

**Natalie Kitroeff** (1:19)
Proponents say it's necessary to right the wrongs of an unequal system.

**SPEAKER_6** (1:23)
It's like the Democrats are doing everything they can to get me to leave the state. I don't want to.

**Natalie Kitroeff** (1:29)
Opponents say it's gonna drive rich taxpayers out of the state.

**SPEAKER_7** (1:33)
Just an idiotic concept that is nothing more than political positioning.

**Natalie Kitroeff** (1:38)
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.

**Laurel Rosenhall** (2:15)
It's great to have you here. Great to be here, thank you.

**Natalie Kitroeff** (2:18)
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.

**Laurel Rosenhall** (2:33)
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 out affordability in California. The electorate is very anti-Trump and feeling somewhat angry about 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.

**Natalie Kitroeff** (3:14)
Okay, let's start there with the unusual structure of it. Just explain what the measure would do.

**Laurel Rosenhall** (3:22)
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 would have to be spent on health care 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 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.

**Natalie Kitroeff** (4:39)
What does that actually mean? Does that go to the money that people are spending on their health care?

**Laurel Rosenhall** (4:47)
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. So for the supporters of this tax, they say this money is essential to keep hospitals open, to keep emergency rooms operating, and to keep the health care system that Californians rely on operating at the same level that it has been before these cuts go into place.