Tax Now, Bust Later: San Diego Supes Propose Real Estate Transfer Tax Increase from 0.11% to a Staggering 6.11%

Brace yourself. Sacramento and the San Diego County Board of Supervisors have their hands in your pockets again.

As California’s budget pressures mount, Democratic supermajorities in the state legislature and on the San Diego County Board of Supervisors are rolling out the same tired solution: raise taxes. Not cut spending or fix broken programs. Just demand more money from residents and businesses already stretched thin.

This comes as Californians struggle under some of the highest housing costs in the country, gasoline prices that never seem to fall, and utility bills that climb regardless of usage. When government can’t make the numbers work, it doesn’t look inward — it looks at your paycheck. Meaningful cost-cutting is rarely considered.

Early proposals make the direction clear. The so-called Billionaire Tax Act, backed by the SEIU and likely headed for the November ballot, would impose a one-time 5% tax on the wealth of billionaires residing in California as of January 1, 2026. Supporters frame it as painless. The reality is otherwise.

California has already watched roughly $1 trillion in wealth leave the state in recent years, along with hundreds of millions in annual income-tax revenue. High-net-worth residents and business owners don’t wait around to be punished — they relocate. Doubling down on policies that accelerate capital flight is not fiscal responsibility. It’s denial.

San Diego County appears eager to follow the same path. The Board of Supervisors recently voted to hire a lobbyist to seek approval from the Legislature to raise the county’s real estate transfer tax from 0.11% to a staggering 6.11%. On a $1 million home, that’s more than $60,000, owed even if the seller takes a loss.

This isn’t a tax on speculation. It’s a tax on mobility. It punishes retirees downsizing, families relocating for work, and homeowners forced to sell in a volatile market. In one of the least affordable housing regions in the nation, it threatens to freeze home sales and further erode household wealth.

Not all taxes are labeled as such. Some are quietly buried in policy.

Minimum-wage mandates and gas tax increases function as hidden taxes on small businesses, the backbone of San Diego’s economy. Restaurants, hotels, tourism operators, contractors, and neighborhood retailers don’t have huge margins. When costs rise, owners respond predictably: cutting hours, delaying hires, raising prices, or closing their doors. The burden doesn’t disappear. It lands on workers, customers, and families already struggling with the cost of living.

What makes this push especially galling is California’s record with the money it already collects. During the pandemic, the state lost tens of billions of dollars to fraud, particularly in unemployment insurance and emergency relief programs. Investigators cited lax oversight, weak controls, and basic administrative failures. Billions more have been wasted through poorly designed programs and contracts with little accountability.

Before demanding more from taxpayers, government should demonstrate competence with existing funds. California has failed that test.

A better policy alternative exists, supported by both economic theory and experience. Lower tax rates can stimulate economic activity, broaden the tax base, and generate higher revenue. Reagan-era U.S. tax reforms and post-Soviet Eastern Europe provide large-scale examples. More recently, Argentina adopted supply-side reforms, including tax reductions and spending cuts. These policies have stabilized markets and sparked renewed private-sector activity.

When individuals and businesses keep more of what they earn, they invest, expand, and hire. More jobs mean more taxpayers, broader revenue, and long-term stability—without squeezing the same shrinking base.

California’s tax-and-spend model has produced the opposite result. Population growth has stalled. The middle class is shrinking. Families and businesses are leaving for states that don’t treat them as a revenue source to be mined. Meanwhile, long-term obligations — pensions, unfunded mandates, and sprawling programs — remain untouched.

Fiscal restraint is not anti-government; it is pro-accountability. It demands audits, measurable outcomes, and the discipline to end programs that don’t work. It recognizes that small businesses are not an unlimited ATM and that regressive taxes hit working families hardest.

Current leadership shows little appetite for reform. The Democratic majority, increasingly “progressive”, consistently favors higher taxes, new fees, expanded mandates, and more regulation.

Voters have another option: end one-party rule. Electing more Republicans to the Legislature could restore balance and promote compromise. Working with fiscally moderate Democrats, they could shift policy toward a pro-growth agenda rewarding work, investment, and entrepreneurship. Without a coalition challenging the tax-first, reform-never mindset, California will remain trapped in rising costs, weaker growth, and declining opportunity. That is a road to ruin. Change will not come from the status quo—it requires voters to force a course correction.