New York | “Let’s tax the rich!” »

(New York) The slogan went up from the crowd who attended, not far from Wall Street, the inauguration of Zohran Mamdani as mayor of New York, on 1^er last January.

“Let’s tax the rich!” Tax the rich! Tax the rich! »

Self-proclaimed socialist democrat, Zohran Mamdani is obviously not opposed to this idea, having himself proposed to tax the millionaires of his city more. But the power to increase taxes on the richest does not belong to him.

On the other hand, the voters of California could give themselves this power in 2026 and thus grant a wish which is not limited to the supporters of the new mayor of New York, judging by the polls.

In late December, a large California union representing health care workers called for a referendum on a proposal called California Billionaire Tax Act. This initiative provides for a one-off tax of 5% on the fortune of some 200 California billionaires.

If the SEIU-UHW union collects a sufficient number of signatures from voters, the referendum will take place in November.

Referendum sponsors estimate the tax would raise $100 billion, 90 percent of which would go to health care funding to offset federal budget cuts.

save-who-can

Since then, it has been a lifeline for certain Californian billionaires. Even if the success of the referendum is far from assured, they are preparing their departure from the Golden State. This is notably the case of Larry Page, co-founder of Google, who recently purchased two properties in Miami for a total of 173 million US dollars.

A resident of Palo Alto for years, Page could be on the hook for about $13 billion, or 5 percent of an estimated $258 billion fortune, if the SEIU-UHW proposal garners a majority of votes in November.

Investor and entrepreneur Peter Thiel, who lives and works in Los Angeles, is also among the Californian billionaires eyeing Miami. He could receive a bill for $1.2 billion following a victory for the promoters of the new tax.

But there’s a catch: Unlike most new taxes, which take effect after being approved, this one would apply to all billionaires who lived in California on January 1^er January 2026.

Lawyers are already ready to challenge this provision. But it may already be too late for the billionaires who have not yet fled California and who would like to do so before the referendum is held.

Wealth gaps

That said, not all billionaires panic. Jensen Huang, CEO of tech giant Nvidia, said he would happily agree to cap around $7 billion if the new tax becomes reality.

“We chose to live in Silicon Valley. And whatever taxes they want to put on, so be it,” he told Bloomberg Television last week.

In defending its proposal, the SEIU-UHW union did not only cite federal budget cuts in the areas of health and education. He also mentioned wealth gaps, which have been widening in the United States for decades.

In 2022, the share of wealth held by families in the richest 10% stood at 69%, while the share held by families in the poorest 50% was only 3%, according to the most recent data provided by the US Congressional Budget Office.

In this context, proposals aimed at increasing taxes on the richest are popular. In New York State, 64% of voters, including a plurality of conservatives, favor increasing income tax rates on the richest 5% of people, according to a poll conducted by Siena College and released last November.

Newsom opposition

Never mind: in California, the state’s Democratic governor, Gavin Newsom, has signaled his opposition to a special tax on the fortunes of billionaires. According to one of his spokespersons, he fears that such a measure would encourage billionaires to leave California.

This opposition could harm the governor’s presidential ambitions. Can he allow himself to alienate the democratic left, which likes the slogan of Zohran Mamdani’s supporters?

California Democratic Rep. Ro Khanna, who is also believed to have presidential ambitions, took a different approach. Even though his constituency includes Silicon Valley, a hotbed of billionaires, he is in favor of the special wealth tax.

He even allowed himself to make fun of Peter Thiel and his ilk who are threatening to leave California.

“I echo the words that FDR (Franklin D. Roosevelt) said with sarcasm about the economic tycoons when they threatened to leave: ‘I will miss them very much,’” he wrote on X.

Californian billionaires promise to make him swallow his words. But California voters may have the last word.