What’s behind these wild new wealth-tax proposals?
#Wealth tax #Capital flight #Fiscal responsibility #California ballot initiative #Unrealized gains #Billionaire tax #Economic stagnation
📌 Key Takeaways
- Proposed wealth taxes in California and New York City aim to fill budget gaps by targeting the net worth of a small number of billionaires.
- Economic critics argue that wealth taxes lead to capital flight and reduced investment, which harms productivity and wage growth for all workers.
- Historical precedents in Europe show that wealth taxes often fail to meet revenue goals and are frequently repealed due to administrative complexity.
- Opponents claim these taxes are a symptom of fiscal irresponsibility, serving as a distraction from the need to control government spending growth.
📖 Full Retelling
🏷️ Themes
Fiscal Policy, Economic Theory, Wealth Inequality
📚 Related People & Topics
California ballot proposition
Statewide referendum item in California
In California, a ballot proposition is a referendum or an initiative measure that is submitted to the electorate for a direct decision or direct vote (or plebiscite). If passed, it can alter one or more of the articles of the Constitution of California, one or more of the 29 California Codes, or ano...
Capital flight
Economic event
Capital flight, in economics, is the rapid flow of assets or money out of a country, due to an event of economic consequence or as the result of a political event such as regime change. Such events could be erratic or untrustworthy behavior by leadership, an increase in taxes on capital or capital h...
Wealth tax
Tax on an entity's holdings of assets
A wealth tax (also called a capital tax or equity tax) is a tax on an entity's holdings of assets or an entity's net worth. This includes the total value of personal assets, including cash, bank deposits, real estate, assets in insurance and pension plans, ownership of unincorporated businesses, fin...
Balanced budget
Financial plan where revenues equal expenses
A balanced budget (particularly that of a government) is a budget in which revenues are equal to expenditures. Thus, neither a budget deficit nor a budget surplus exists (the accounts "balance"). More generally, it is a budget that has no budget deficit, but could possibly have a budget surplus.
📄 Original Source Content
By Veronique de Rugy Contributing writer Feb. 5, 2026 10 AM PT 6 min Click here to listen to this article Share via Close extra sharing options Email Facebook X LinkedIn Threads Reddit WhatsApp Copy Link URL Copied! Print 0:00 0:00 1x This is read by an automated voice. Please report any issues or inconsistencies here . p]:text-cms-story-body-color-text clearfix max-w-170 mt-7.5 mb-10 mx-auto" data-subscriber-content> When government grows to dominate ever-larger shares of the economy and when politicians refuse to be responsible about what they spend, there’s a predictable next move: insist that the problem is “the rich” not paying enough. Never mind that high earners already shoulder a disproportionate share of the tax burden. Never mind that relying on a small and mobile group of people for the bulk of your revenue makes public finances more volatile, not more stable. No, once spending is treated as untouchable and restraint as politically impossible, it’s only a matter of time before politics demands more, more, more. More taxes and more distortion. This helps explain why the wild new forms of wealth taxes are popping up. California voters are heading toward a November ballot fight over the so-called “one-time” 5% tax on billionaires’ net worth, tied to residency on a date that’s already passed . Illinois lawmakers recently flirted with a tax on unrealized gains — think of stocks yet to be sold at fluctuating prices that only exist on paper — before retreating. New York City Mayor Zohran Mamdani wants a wealth tax to help close the city’s roughly $12-billion budget gap. And prominent progressive Democrats have explicitly endorsed national wealth taxes (e.g., proposals from Sen. Elizabeth Warren). Advertisement Different places, same impulse: Avoid hard fiscal decisions by squeezing a narrow group harder. A wealth tax is not like the income or consumption taxes we’re used to. In theory, it’s a cut of a person’s entire stock of assets (less their liabilities). In ...