The Washington Post’s editorial board is warning California that aggressive new taxes on the ultra-wealthy could backfire by driving billionaires out of the state.
In an editorial published Thursday titled, “California will miss billionaires when they’re gone,” the Post’s editorial board argued that the state risks serious economic consequences by pushing wealthy residents away.
The board compared California’s tax approach to teenage boys using cologne, arguing that while some taxation is necessary, too much quickly becomes counterproductive.
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“Some [taxes] are necessary to pay for public services, but government eventually reaches the point of diminishing returns — then passes it into repulsion,” the board wrote.
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The editorial noted that when California voted years ago to raise tax rates on high-income households, many top earners began leaving the state or reducing their taxable income.
Despite the exodus, a proposed ballot initiative could appear in November that would impose a 5% wealth tax on the state’s billionaires.
Regarding the move to increase taxes, the Post praised the state’s current Democratic governor, noting, “Gov. Gavin Newsom (D) opposes the wealth tax because he understands it would kill the Golden State’s golden goose.”
The Post editorial board reported that several billionaires are already looking to leave California ahead of that possibility, including Google cofounder Larry Page and Palantir cofounder Peter Thiel.
The board warned that California’s tax system is already heavily focused at the top, making the state vulnerable if wealthy residents relocate. It cited a 2024 study that found previous tax hikes wiped out nearly half of the expected revenue within a year, as high earners moved away or adjusted their taxable income.
The editorial argued that once top earners leave, activists will “target the next tier of ‘rich’ people who don’t have as much flexibility to flee.” The board described that scenario as a “disaster” for California’s economy and urged voters to reject proposals for higher taxes on the wealthy.
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