Stick a Fork in California: Gov. Newsom’s Proposed Retroactive Billionaire Tax
IRS Study shows California is losing a taxpayer every minute to states like Florida, Texas, and North Carolina
By Katy Grimes, November 24, 2025 2:45 am
California Governor Gavin Newsom is pushing a retroactive billionaire tax targeting the roughly 220 billionaires residing in California in 2025, ignoring that these individuals are the most financially mobile and can live anywhere. Expecting them to remain in the state as if they will happily and willingly hand over even more of their wealth surely must be facetious.
SEIU is sponsoring the “2026 Billionaires Tax Act.” The measure, recently listed on the Attorney General’s website, would impose a one-time 5% tax on individual wealth exceeding $1 billion, Marc Joffe wrote for the Globe this week. He explains the measure and more:
Although the tax would be levied based on 2026 net worth, it would apply to billionaires who resided in California in 2025, so theoretically it could not be avoided. Of course, billionaires are well equipped to defend themselves in court, so the constitutionality of this unprecedented tax will be rigorously tested.
Proponents assert that the measure would not cause billionaires to flee the state because of the one-time nature of the tax. Unlike federal wealth taxes floated by Bernie Sanders and Elizabeth Warren, the SEIU tax would not be applied each year.
But the flaw in this argument is obvious: if the state could impose a wealth tax once, it could do so again and again. So, yes, billionaires might well leave if this measure passes.
Why are California businesses and residents fleeing the once-Golden State in droves? We’ve asked and answered this question many times.
California has been bleeding residents and their tax revenue for many years with moves to states with no income tax or very low income tax: Florida, Texas, Arizona, Idaho, Tennessee, South Carolina, Nevada, and even Washington State.
California’s own Chevron Oil Company moved its headquarters to Houston, Texas from San Ramon, CA where it has been based since 1879, one of the biggest businesses to flee the Golden State. Chevron is in good company joining X/Twitter, Space X, Oracle, Hewlett Packard, Charles Schwab, and Toyota Motor North America, Nissei America, Inc., The Joe Rogan Experience, Gordon Ramsay North America, The Rubin Report, to name just a few of the businesses leaving California because of the state’s leftist/Marxist politics and regulatory environment.
Yet Gov. Newsom and Democrats are doubling down and still gouging taxpayers and businesses with some of the highest taxes, fees and draconian regulations in the nation.
“Despite the towering deficit, Newsom and the Democratic Party continue to spend wildly on a boondoggle bullet train and to engage in last-minute redistricting to gerrymander the state further,” Jonathan Turley writes. “They have also moved to extend Medi-Cal to illegal immigrants at a massive cost to the budget. Newsom is also pushing ahead with a Commission to pay reparations to black citizens.”
Turley reports on just how bad California is:
“A study of IRS data by the National Taxpayers Union Foundation which found that California is losing a taxpayer roughly every minute, as states like Florida, Texas, and North Carolina attract new residents due to lower taxes and higher standards of living.
In comparison, Florida gains a new taxpayer every 2 minutes and 9 seconds while Texas gains one every 2 minutes and 53 seconds.
The result has been a bonanza for Florida, which is now collecting $4 billion more per year for its budget.
The states losing taxpayers at the fastest rate are California, New York, and Illinois. Here is the rate of loss:
California: every 1 minute and 44 seconds
New York: every 2 minutes and 23 seconds
Illinois: every 6 minutes and 4 seconds.
Massachusetts: every 11 minutes and 38 seconds
New Jersey: every 14 minutes and 14 seconds.
In 2023, we asked Why Did 352 California Companies Flee to Other States in Three Years? Here’s why: Low-to-no income tax states gained $391 billion from California during 2018 to 2021, coinciding with Gavin Newsom’s election as governor.
As Economist Art Laffer and Chapman Economics Professor James Doti correctly said not long ago, Gov. “Newsom doesn’t appear to see is the deleterious long-term effects of a highly progressive tax system. Case in point: The ‘one-percenters’ who pay 50% of the tax are voting with their feet by leaving California in droves.”
They explained that the ten states with the lowest income taxes including Florida and Texas, gained a cumulative net inflow from all Adjusted Gross Income (AGI) classes of $391 billion from California during the entire 2018 to 2021 period. Note that 2018 was the final year of Democrat Governor Jerry Brown. Gov. Newsom ran for governor in 2018 and was elected. He took office January of 2019, so the 2019-2021 belongs to Gov. Gavin Newsom.
“The 10 states that ranked the highest in income taxes — California, New York and New Jersey are in this group — lost a cumulative net inflow in AGI of $391 billion. The fact that the 10 states with the lowest income taxes gained in AGI the same amount as the loss in AGI for the 10 states with the highest income taxes is not a coincidence.” …
Where did these companies go?
Most went to Texas. Here’s why:
“Texas offers a combination of unique competitive business advantages that no other state can claim: a business-friendly climate—with no corporate or personal income tax—along with a highly skilled and diverse workforce, easy access to global markets, robust infrastructure and a reasonable regulatory environment,” Texas Governor Greg Abbott said when he recently announced that another major California business was moving to Texas. “California-based Ruiz Foods is moving its corporate HQ to Frisco,” he said. “With an unrivaled business climate and skilled, diverse workforce, Texas is America’s #1 economic destination….”
Newsom might find that lowering tax rates results in higher rather than lower tax revenues, as the Laffer Curve has shown time and time again.
“The Laffer Curve showcases the intricate relationship between tax rates and government revenue, a concept popularized by economist Arthur Laffer in 1974. This theory posits that both excessively high and low tax rates result in reduced tax revenues, suggesting that tax cuts can potentially enhance revenue collection.”
“As drawn, the Laffer Curve shows that at a tax rate of 0%, the government would collect no tax revenue, just as it would collect no tax revenue at a tax rate of 100% because no one would be willing to work for an after-tax wage of zero.
Turley has a new book coming out, Rage and the Republic: The Unfinished Story of the American Revolution, in which he explains “there is a common myth that the top five percent of this country do not ‘pay their fair share.’ However, putting that debate aside, the question is whether it will produce more revenue than it costs the state in the long run. As these politicians campaign on clipping the “fat cats” who are not paying their fair share, many are likely to follow the exodus to lower tax states with greater fiscal discipline.”
Turley concludes, “what is clear is that Democratic states are not showing any greater fiscal discipline as they careen toward budget meltdowns.”
And to think that Gavin Newsom is running for President on this atrocious record…
A California native and Navy mom, Katy lives in Sacramento, CA.
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It NEVER ceases to amaze me as to how unaware these so called elected officials are. It seems to me that not much thought goes into the laws these clowns make. They strike me as not very deep thinkers. When I was much younger, and through out my life, I have always thought…how many laws can government come up with before it comes to a point where the ordinary citizen would be basically confined to their home, because if they even stepped outside to breath they would be breaking the law. I mean year after year, they sit up there and pass laws, taxes, rules etc. I guess they have to try to justify their jobs. There was / is a saturation point, looks like California has surpassed that and they are not aware of it, or maybe they are. Yea, stick a fork in California, we are done.
Newsom’s sterling fork . . . tarnishing California.
He who tries to shine dims his own light. Lao Tzu
And those very same people that increasingly repress more and more of the citizens elect the idiots cycle after cycle. Rule me more, daddy.
As we learned in a recent report, it’s not the voters, it’s election fraud. Yes, we have many ignorant voters, but the intelligent ones would override them if the machines weren’t cheating us.
And those very same people who are increasingly repressed, as more and more of them with lower and lower incomes, they elect the idiots cycle after cycle. Rule me more, daddy.
We’re already there. If you haven’t read it already, check out Three Felonies a Day, Harvey A. Silverglate. A short review: “‘Three Felonies a Day’ is a concept that suggests the average American unknowingly commits multiple federal crimes daily due to the vast and vague nature of federal laws.”
I was at the local Walmart and there was a table full of “vote for” the Billionaire Tax! Naturally (it’s Sacramento and in an area of middle and lower class households) there were people signing…most likely being told getting more money from rich people will help them). Disgusting
Thank you, Joanie Toomire, for sharing what you saw with your own eyes.
Agree that this is “disgusting.” All of it.
Paraphrasing Darrell Steinberg, about the time he left the state senate and became mayor of Sacramento –
“The idea that businesses are leaving California because of higher taxes and more regulation is a myth.”
Another dimwitted Democrat whose message to businesses and businessmen is “Don’t let the door hit you in the ass on the way out”.
So the XVI Amendment gives the power to tax to Congress. Thanks to the commie movement 100 years ago, it says they can ‘tax ANY source of INCOME however derived’. Capital appreciation is NOT income, the cleverly worded phrase seem to leave it open unless we look at the debate in congress as to what they included. Since the States are not Congress, how do they have that same right? Where does the Constitution say they government can confiscate personal property? Oh, sorry we’re not playing by those rules………
Yah, its a totally deficient definition, circular argument stuff.
The exact phrase is “gross income means all income from whatever source derived”.
If you asked someone to define “cat” and they said “A cat is a cat no matter where its from”
You would wonder if they were autistic, right?
Well there ya go.
i would assume most of the billionaires that would remain in CA are leftist democrat elites. If they were smart the would hightail it out of here. they might be smart when it comes to tech, finances not so much.
Gavin Newscum is a vile, lying, cheating, crooked adamschitt head snake-oil salesman. Never believe a word that comes out of that SOB scum-bag’s mouth.
You’re too kind.
Let’s see what happens. This won’t help Newsom in any national campaign. He should be smart enough to know that. (did you know his SAT score is only 3 digits?). He’ll block it or veto it.
Off topic: SAT scores apparently meaningless:
https://www.aei.org/education/a-sad-collapse-in-student-preparation-at-uc-san-diego-was-inevitable/
I love this statement,
“Among students placed into Math 2, UCSD’s most remedial course, one in four had earned a perfect 4.0 in high-school math.”
This state is so messed up! Thank you, Democrats.
And this sobering reflection of America’s work force.
https://fortune.com/2025/11/12/ford-ceo-manufacturing-jobs-trade-schools-we-are-in-trouble-in-our-country/
Time and time again, this is what we get when we elect “community organizers” (even wealthy, “connected” ones (to the Getty family)) that have ZERO economic, finance or real-world management experience to elected offices…
Legislation by EMOTION,not ECONOMICS….
And we get a massive budget shortfall, too….
These people are idiots and they FAIL UPWARDS….
Democrats seem to think they can create laws that cannot be challenged or avoided by making them retroactive.
…that would most likely be a silver fork that Governor Guido stole from The French Laundry….
……..that would most likely be a silver fork that Governor Guido stole from The French Laundry……..
As someone who’s never worked a day in his life, Newsom “exists” in his entirety, on “other people’s money.”
The recent, non partisan Legislative Anayst Office revision showing an total budget deficit of $18Billion+ for the current fiscal year and balloon to twice that ($35illion+ nexty year) is driving this initiative. Gov. Grabby Hands needs a short term fix to preserve his ‘asspirations’ for higher office. Off topic- where is First Partner Crazy Eyes lately? Must be busy producing informercials for PG&E as we head into another fire season..
Newsom never fails to find a way to become the butt of a joke.
I think everyone alive in CA should be taxed 75% of their income., no exceptions. And retroactive 10 years. And due in full immediately. Then , we might see some much needed, uh, er…”reform”.
I know someone who was in Gov Brown’s inner circle. It was Newsom’s turn to be governor, he was chosen, selected. And he wasn’t chosen because he’s smart or anything else related to competency. The elections were just formalities to cover appointment. The elections had one preordained outcome, and the recalls were defeated by county registrars of voters.
I recall a young, aspiring politician from Chicago (with sharply creased trousers) back in 2008 who was asked in an MSM interview something along the lines of, “but some economists cite recent history when tax cuts resulted in increased revenue coming in to the government. What if your tax increases on the wealthy result in lower revenues?” His answer was that the focus shouldn’t be on revenue but that it was an issue of “fairness.” So it’s not even about resourcing the supposedly compassionate policies the Democrats advocate. They would rather stoke class envy than actually solve problems. It will never be enough.
I hope this law passes, because it would drive all the billionaires out of california. then, there would be no more rich people paying for the poor people and for once, in the entire history of california, the poor people would have to start paying their fair share of taxes. that’s my only complaint about california – too many leeches. btw, if anyone has lifetime tax payments which are less than their lifetime government benefits received, then they are worthless to society and shouldn’t even be allowed to vote. it’s insane that losers in life can vote to take other people’s money!