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## California’s Billionaire Battle: Will a Wealth Tax Spark an Exodus?
California, a state synonymous with innovation, glamour, and immense wealth, finds itself at a crossroads. A controversial proposal for a new wealth tax is generating significant debate, with leading voices warning it could trigger a mass exodus of its richest residents, leading to profound economic consequences for the Golden State. Luxury real estate magnate Josh Altman, known for his insights from “Million Dollar Listing,” has issued a stark warning: this tax could be a self-inflicted wound.
### The Looming Threat: Billionaires on the Brink of Departure
Altman, speaking on “Varney & Co.,” didn’t mince words about the potential impact of California’s proposed wealth levy. He highlighted the state’s unique position, boasting between 200 to 250 billionaires – more than any other U.S. state. However, he cautions that this concentration of wealth also presents a political vulnerability. With 40 million residents, 23 million of whom are eligible voters, Altman believes that if the measure reaches the ballot, the billionaires are unlikely to prevail.
“I personally know seven billionaires who have already packed their bags and relocated from California,” Altman revealed, citing destinations like Las Vegas and Florida as popular new havens. This sentiment echoes a broader trend, with high-profile figures like Google co-founder Larry Page reportedly investing heavily in Miami real estate amidst similar concerns.
### Beyond the Ultra-Rich: The Cascading Consequences
While the proposed initiative targets the net worth of individuals exceeding $1 billion with a one-time 5% tax, Altman argues that the real suffering won’t be among the ultra-wealthy themselves.
#### The “Trickle-Down” Effect: Jobs and Revenue at Risk
“It’s not the billionaires who will bear the brunt,” Altman asserted. “It’s the cascading consequences, the hundreds of thousands of people who are employed by these billionaires, the myriad businesses they support, and the staggering sum in potential tax revenue – an estimated trillion dollars – that we stand to lose.”
He recounted a telling anecdote from a billionaire acquaintance: “You know what the difference is between $100 million and a billion? Nothing. They’ll be fine.” The broker passionately stressed that it’s the dependent workforce and the state’s economy that will truly suffer if these job creators and their ventures are driven away. “We are effectively running them out of California,” he concluded.
#### Dissecting the Proposed Levy
The contentious ballot initiative outlines a one-time tax, due in 2027, on the net worth of California residents exceeding $1 billion. Taxpayers would be granted the flexibility to spread payments over five years, though these installments would include additional, non-deductible charges, according to analysis from the Legislative Analyst’s Office.
### A Looming Economic Shift for California?
As California navigates complex challenges, including the arduous post-fire rebuilding process, the debate over this wealth tax adds another layer of economic uncertainty. Even Governor Gavin Newsom has acknowledged the potential for such a tax to be “really damaging,” recognizing the risk of billionaires and their businesses fleeing the state. The crucial question remains: will California’s pursuit of additional revenue inadvertently undermine its economic foundations and diminish its golden allure? The answer could shape the state’s future for decades to come.
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### Summary of Main Points:
* **Proposed Wealth Tax:** California is considering a one-time 5% tax on residents with a net worth over $1 billion, due in 2027 and payable over five years.
* **Billionaire Exodus Warning:** Luxury real estate broker Josh Altman warns this tax could drive many of California’s 200-250 billionaires out of the state. He personally knows seven who have already left for places like Nevada and Florida.
* **Political Vulnerability:** Altman believes the sheer number of voters (23 million eligible) compared to the number of billionaires means the tax is likely to pass if it reaches the ballot.
* **”Trickle-Down” Harm:** Altman argues that the real victims won’t be the billionaires themselves, but the “hundreds of thousands” of people they employ and the “trillion dollars” in potential tax revenue the state could lose.
* **Economic Impact:** The departure of the ultra-wealthy could have severe cascading consequences for California’s economy, leading to job losses and a significant reduction in state funds.
* **Official Concern:** Even Governor Gavin Newsom has expressed concerns that a wealth tax could be “really damaging” to the state.