More than half of prospective voters in California are in favor of a proposed wealth tax targeting billionaires, despite ongoing debates about its economic impact on the state. This initiative has sparked discussions around its potential benefits and drawbacks.
According to a survey conducted by the Public Policy Institute of California, 54% of likely voters support the tax plan. This proposal aims to introduce a one-time 5% tax on residents whose assets surpass $1 billion. Backed by labor unions, the measure is gathering momentum, with proponents claiming they have secured enough signatures to bring the issue to the ballot this November.
The survey, which took place from May 14 to 18, included responses from 986 likely voters. The results highlighted significant partisan differences in opinion. Among Democrats, a strong 76% expressed support for the tax, while a substantial 82% of Republicans opposed it. Independent voters presented a more divided stance, with 53% leaning in favor of the measure.
Income levels also played a role in shaping opinions. Voters earning less than $100,000 per year showed clear support for the tax. In contrast, those with higher incomes were more divided, with only 52% indicating they would vote ‘yes.’ This split underscores the complex dynamics at play in the ongoing debate over wealth taxation in California.
When the survey looked at voters’ income, those making making less than $100,000 decisively were in favor of the tax, but higher-income voters were more split. Just 52% of such voters said they would vote ‘yes.’
While renters favored the tax 71% to 27%, home-owning Californians saw a nearly 50-50 split in their stances on the issue.
Support was stronger in urban areas like Los Angeles than in the Central Valley, where 56% of likely voters said they would vote ‘no.’
Business groups and other opponents, including Gov. Gavin Newsom (D), have warned the state’s economy would be devastated by such a tax with CEOs fleeing the state alongside potential jobs. More than 108,000 jobs could be lost if the tax goes into effect, one analysis concluded, and $28 billion worth of wages would also be lost in California.
Unions insist the tax is needed to help California grapple with federal funding cuts and changes to the state’s health care and other systems.
But a paper released Wednesday by the Hoover Institution disputed claims by supporters that the tax would address a “$19 billion-per-year budget hole” caused by Washington. California had a spending problem with its Medicaid program that predated the federal cuts, researchers said.
“Costly spending increases reflect Sacramento’s inability to control a program it expanded through its own policy choices. A wealth tax doesn’t fix this spending problem; it just delays the reckoning,” said Joshua D. Rauh, an economics fellow at Hoover.
Still, supporters are doubling down on using the impending health care cuts to campaign for the tax. They pointed Thursday to a report that California’s uninsured population could double from the cuts and federal Medicaid work rules.
“California is heading toward a healthcare affordability and accessibility crisis,” said Debru Carthan, executive vice president of SEIU-UHW, one of the lead unions behind the tax proposal.
“Because of massive federal healthcare cuts, millions of Californians will lose coverage and hospitals will be forced to close their doors forever, unless billionaires finally pay their fair share.”
Already, a number of the ultrawealthy have announced they’ve left California. Some, like Google co-founder Sergey Brin, are pouring money into competing ballot initiatives.