Bernie-backed tax on billionaires is TOO extreme even for California

A proposition imposing a new tax on billionaires in California has been defeated despite being endorsed by notable far-left politicians.Proposition 40 called for imposing a one-time tax that would apply only to billionaires, confiscating 5% of their net worth with some assets exempted from the calculation. In order to pre-empt billionaires leaving the state to avoid the tax, it would be imposed retroactively to residents living in California on Jan. 1, 2026.'It will be the beginning of not only a broader U.S.-wide movement, ultimately paving the way for a federal wealth tax.'Opponents of Proposition 40 said the tax would backfire and lead to less tax revenue as billionaires would flee the state for lower-tax locales.Supporters hoped the proposition would spark a global movement to tax the ultra-wealthy in order to fund massive increases in social spending. Among the supporters of the bill were Sen. Bernie Sanders (I-Vt.) and Rep. Ro Khanna (D-Calif.)."If California says, 'We can tax billionaires. We can tax the wealthiest, most powerful people in the world,' it will be the beginning of not only a broader U.S.-wide movement, ultimately paving the way for a federal wealth tax — but I think it will be the beginning of an international movement," said economist Gabriel Zucman to the "Planet Money" podcast. Zucman estimated the tax would bring in $100 billion in revenue, which would add up to about a third of the total California budget.But others like Stanford economist and Hoover Institution senior fellow Joshua Rauh came to a different conclusion based on estimates of billionaires fleeing the state to avoid the tax."It would not raise $100 billion for the state," Rauh said. "We calculate that Proposition 40 would cost the state of California $39 billion."California voters shot down Prop 40 last Tuesday with 52.8% voting no and 47.2% voting yes, according to the AP and NBC News.RELATED: Bernie Sanders gets obliterated for dragging Melania into left-wing criticism of WaPo layoffs One estimate found that opponents of the proposition had poured about $333 million into defeating the billionaires' tax.Although he was hopeful for the proposition to pass, even Zucman admitted that other ultra-wealthy taxes had a dismal track record of success in other countries.Like Blaze News? Bypass the censors, sign up for our newsletters, and get stories like this direct to your inbox. Sign up here!