California could be on the verge of punching itself in the … pocketbook.

A proposedwealth tax on billionaireswould not only drive California’s richest residents out of the state, but it could also result in a loss of state tax revenue up to $4.5 billion annually, according toa new reportby the California Tax Foundation.

The proposed ballot initiative for the fall is being led by public employee union SEIU-UHW and it would impose a one-time 5% tax on billionaires to raise up to $100 billion for health care and education.

However, early signs suggest some of the Golden State’s highest net-worth residents —including Larry Page, Sergey Brin, Peter Thiel and Mark Zuckerberg— have already left or are preparing to jump ship.

The California Tax Foundation’s analysis suggests the long-term consequences could outweigh the short-term gain, warning that “the net present value of these ongoing losses outstrips the one-time revenue projected by the initiative’s proponents.”

“It really does bring up the issue of killing the goose that’s laying the golden eggs,” said David Kline, vice president of communications for the California Taxpayers Association.

A key question is whether billionaire departures will accelerate if voters approve the proposed measure in November. The report points to a growing list of high-profile tech figures who have either left or are “reportedly planning to join the tech billionaire exodus,” highlighting how mobile California’s wealthiest residents can be.

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“Billionaires, you can love them or hate them, but the reality is that when they’re in California, they create a lot of jobs and just economic activity around them and around their businesses,” Kline said.

Labor groups backing the proposal argue the tax is necessary to address widening inequality and stabilize funding for public services. Supporters,including SEIU-UHW,have framed the measure as a way to ensure the state’s wealthiest residents contribute more toward schools and healthcare in response to state-funding cuts made by the Trump administration’s “Big Beautiful Bill.”

Source: California Post – Breaking California News, Photos & Videos