If You Tax Them, Will They Leave?

"To hear some Silicon Valley insiders tell it, California is on the verge of economic suicide. This November, Californians will likely vote on a ballot initiative that would levy a one-off tax on the wealth of about 200 of the state's richest residents. Garry Tan, the CEO of the start-up incubator Y Combinator, posted on X that the measure would "kill and eat the golden goose of technology startups in California.""

"The California wealth-tax idea originated as a response to a federal tax cut. Donald Trump's One Big Beautiful Bill Act lowered taxes for corporations and rich individuals and paid for those cuts in part by reducing Medicaid spending. That left a roughly $20 billion annual shortfall in California's health-care budget. If left unfilled, that could cause 1.6 million low-income Californians to lose their health care, according to the Kaiser Family Foundation."

California voters may decide on a one-off tax targeting roughly 200 of the state's wealthiest residents to address a roughly $20 billion annual shortfall in the health-care budget caused by a federal tax cut. Tech leaders and investors warn the tax could drive wealthy residents and startups out of the state, while progressive backers argue the measure forces the ultra-wealthy to pay a fair share. The outcome will hinge on how billionaires respond if voters approve the measure. A major health-care-employee union collaborated with progressive economists and lawyers to design the proposal.

Read at The Atlantic