The facts
Californians vote in November on Proposition 40, which would impose a historic one-time tax equal to 5% of the accumulated wealth of any taxpayer whose taxable assets, including stocks, homes, artwork, and more, are worth more than $1 billion. Passage would enact the first state-level wealth tax, and the ballot measure's backers, including socialists, see it as a trial for wealth taxes in other states and at the federal level.
Sen. Bernie Sanders (I-VT) has called Proposition 40 “a model that should be emulated throughout the country.” Six Nobel Prize-winning economists wrote an open letter arguing the move could “kickstart” a movement for higher taxes on the wealthy across the U.S.: “As Californians head to the polls, their vote may well come to be seen as a turning point in the battle between democracy and oligarchy.”
The mechanics are where it gets good. Instead of the state hiring assessors, billionaires would be responsible for valuing their own possessions and private businesses, forced to hire their own appraisers, and then the California Franchise Tax Board would decide whether to accept or reject that valuation. Understate the tax by more than $1 million and the penalty is 20%; understate by more than $10 million and it is 40%. Certified appraisers can be fined 2% or 4% of the understatement, which the Tax Foundation's Jared Walczak called “near ruinous” for the appraiser. And the tax is retroactive, applying to all taxpayers residing in California as of Jan. 1. Walczak said making the tax retroactive raises constitutional questions: “Many observers, myself included, believe that the retroactive elements would not hold up in court,” he said.
The money is already stupid. Opponents have raised $187 million against the proposition, supporters $32 million, according to the Los Angeles Times, with the bulk of that coming from opponents. Two rival initiatives, Propositions 41 and 42, would nullify the wealth tax if they pass with more votes. A September Berkeley-Politico poll found 45% support, down from February. “The trend in Prop 40 is certainly going against Prop 40,” said UC Berkeley's Jack Citrin. Prediction market Kalshi gives it 74% implied odds of failing. Even Gov. Gavin Newsom (D-CA), seen as a possible 2028 presidential front-runner, opposes it: “Over the years, you would see a significant reduction in taxes because taxpayers will move, and that is what I fear at a state level,” he said. Proceeds would go into a “Billionaire Tax Reserve Fund” to fund Medi-Cal and similar healthcare programs for low-income Californians.
Our take
California's Proposition 40 is a spectacularly stupid piece of legislation, a tax plan so fucking idiotic it makes you wonder if its backers are huffing their own progressive farts. It's not a wealth tax; it's a retroactive shakedown with a homework assignment attached. The state can't be bothered to hire assessors, so it makes billionaires appraise their own fucking art collections and private jets, then reserves the right to say 'nah, that's bullshit' and fine them 40% for understating it. It's like asking a thief to inventory his own loot and then punishing him for being a lying prick about it. What a fucking model.
Bernie Sanders looked at this clown-car of a policy and called it 'a model that should be emulated throughout the country.' Emulate what, Bernie? A system so constitutionally dubious that even the state's own governor, Gavin Newsom - a man whose entire brand is California progressivism - is publicly begging voters to kill it because he knows the billionaires will just fucking leave? That's the genius plan: tax the rich, then watch them take their money and their tax revenue and fuck off to Texas or Florida. Newsom's pathetic warning that 'taxpayers will move' is the quiet part said out loud by the guy who's supposed to be selling this bullshit. He knows it's a suicide pact for the state's tax base.
The mechanics are where the true, pants-on-head stupidity shines. Billionaires have to hire their own appraisers, and if those appraisers fuck up the valuation by more than $10 million, they get fined 4% of the understatement. The Tax Foundation's Jared Walczak called this 'near ruinous' for the appraiser, which is a polite way of saying no competent professional would ever touch this shit with a ten-foot pole. So you'll get a parade of desperate, underqualified dickheads signing off on valuations, creating a legal and accounting nightmare that will tie up the courts for a decade. The retroactive element is the cherry on this shit sundae, applying to anyone who was in California on January 1. It's a fucking trap, a 'gotcha' tax for people who already left.
And who wants this brilliant plan? Not Californians, that's for fucking sure. Opponents have raised $187 million against it, supporters a pathetic $32 million. Polls show support dropping, and prediction markets give it a 74% chance of failing. The people who actually live there, who have watched Sacramento piss away money for decades, looked at a tax on someone else's money and said 'no thanks, you fucking grifters.' But six Nobel Prize-winning economists wrote an open letter calling it a 'turning point in the battle between democracy and oligarchy.' That's the kind of pompous, self-important bullshit you write when you're so far up your own academic ass you've forgotten what a real, working economy looks like. They want to use California as a petri dish for a national policy that will drive capital and jobs into the fucking ground. What a bunch of cunts.
