Patriot,
The California Billionaire Wealth Tax ballot initiative would impose a one-time 5 percent tax on the wealth of California’s billionaires.
However, it gets worse.
The poorly drafted initiative creates many scenarios in which tax liability would be vastly more than 5 percent of net worth. For example, the law allows for valuation based on voting interests in a company when they exceed actual economic stakes.
Take Tony Xu, the founder of DoorDash, for example.
He owns 2.6 percent of DoorDash but controls 57.6 percent of the company’s voting shares, which would yield a wealth tax liability of $2.62 billion on an ownership interest worth $2.41 billion under this plan. Since selling his shares incurs capital gains tax, his total tax liability for his DoorDash shares would be $4.17 billion, 173 percent of their value.
The wealth tax would bankrupt Tony Xu.
We need tax policies driven by experts, not demagogues.
I am personally inviting you to help us simplify the tax code and make sure it doesn’t stand in the way of your success.
Tax Foundation’s experts meet regularly with lawmakers across the country. We’re not just educating the public. We’re meeting with legislators to help them understand tax policy beyond campaign talking points.
Patriot, this isn’t the first time a bad tax has been proposed. It won’t be the last time either.
Can you make a (tax-deductible) donation of $10, $50, $250, or even $500 and support Tax Foundation? Click here to join today.
We’re looking for 50 new donors to join us and help simplify the tax code.
Since 1937, our principled research, insightful analysis, and engaged experts have informed smarter tax policy in the US.
Tax Foundation sounded the alarm on wealth taxes years ago. Now, voters are facing an important decision in California. It’s one that may have dire consequences for the state’s economy.
California often leads on these harmful ideas, but they can easily and quickly spread to the rest of the country. Tax Foundation is doing the critical work of educating both voters and legislators on the consequences of California’s wealth tax before this idea goes national.
If you believe we need tax policy determined by research, not partisan rhetoric, then I am counting on your support to fuel our mission.
Please become one of our new supporters today by donating $10 or more to the Tax Foundation.
Thank you,
Daniel Bunn
President and CEO
Tax Foundation
Tax Foundation is a 501(c)(3) nonprofit educational organization. Any donations made to Tax Foundation are tax-deductible to the full extent allowable by law.