Bernie Sanders promotes wealth tax as debate heats up
Bernie Sanders supports a wealth tax, but Congress remains unmoved. Meanwhile, polls show that many Americans support taxing billionaires.
A proposal to tax California’s billionaires is testing the limits of America’s eagerness to make the super-rich pay.
The so-called Billionaires Tax would raise an estimated $100 billion by imposing a one-time 5% “wealth” tax on about 200 California billionaires. Supporters are collecting signatures to put the tax on the November ballot.
A poll released in March by the University of California, Berkeley and Politico found that support for the billionaire tax is high among California voters, with half supporting it and 28% opposing it.
But California Governor Gavin Newsom opposes the tax, and some of the state’s prominent billionaires say they would rather move than pay the tax.
Those relocating to more tax-friendly states could include Google co-founders Larry Page and Sergey Brin, PayPal co-founder Peter Thiel and venture capitalist David Sachs, according to a report by the National Taxpayers Union Foundation. Meta founder Mark Zuckerberg is reportedly considering moving to Florida.
Billionaire Chamath Palihapitiya claimed in a January post on X that Californians worth a total of $700 billion have already left the state.
Critics of the billionaire tax say the exodus portends the bill’s failure before it reaches a vote.
“If your goal is to collect as much income as possible from billionaires, forcing them to leave is not the best way to go about it,” said Andrew Wilford, director of national policy at the National Taxpayers Union Foundation, a taxpayer advocacy group.
More states are taxing their wealthiest residents
California’s billionaire tax may be an outlier, but “wealth taxes” have become popular in recent years as a way to raise revenue from high-income earners in politically progressive states.
In 2022, Massachusetts voters approved the Fair Share Amendment, which imposes a 4% “surtax” on incomes above $1 million to fund education and transportation. The tax generated $2.5 billion in its first year.
The Washington State Legislature recently approved a 9.9% tax on income over $1 million in the state, which has no other income taxes. The “millionaire’s tax” is expected to raise $3.4 billion annually.
New York City’s new mayor, Zoran Mamdani, wants to raise income taxes for Gotham residents earning more than $1 million, raising the city’s top tax rate from about 3.9% to 5.9%.
The idea of taxing the wealthy has populist appeal in an era of widening income inequality.
The top 10% of Americans now control 60% of the nation’s wealth, according to a 2024 report from the Congressional Budget Office.
According to a 2026 Oxfam report, the 12 richest billionaires alone own more wealth than the poorer half of the world’s population.
According to a Gallup poll, only 12% of Americans think high-income earners pay too much in taxes, while 58% think they pay too little in taxes.
Will a “wealth tax” drive out the wealthy?
A common argument against taxing the wealthy is that the rich will drive out the wealthy.
Reacting to a series of headlines about California billionaires leaving the state, Newsom told Politico, “This is my fear. It’s what I’ve been warning you about. It’s happening.”
The billionaire tax could still generate billions of dollars in revenue, but it would be a one-time tax. When billionaires permanently leave California, their future income remains with them.
“If someone leaves because of one tax and never comes back, that’s decades of income taxes that they’ll never get back,” said Jared Walczak, a senior fellow at the nonpartisan Tax Foundation.
Supporters of the California tax say those concerns are overblown.
“For the people who are going to pay it, the California wealth tax has no impact whatsoever on their standard of living, their children’s standard of living, their grandchildren’s standard of living,” said Carl Davis, research director at the left-leaning Institute on Taxation and Economic Policy. “That’s a drop in the bucket.”
Based on past experience, Davis predicts that the number of billionaires leaving California over the millionaire tax will be “more than zero, but still very small.”
Studies are divided on whether higher taxes encourage wealth migration.
The number of millionaires has increased, not decreased, since Massachusetts enacted tax increases on high earners, according to a report by the Progressive Policy Institute.
But every state has seen an increase in millionaires, with Massachusetts adding millionaires at a slower pace than most other states, the Tax Foundation said in its rebuttal.
Here’s why the billionaire tax targets wealth, not income
Most wealth taxes to date have focused on income. California’s efforts focus instead on wealth.
Research shows that income taxes often fail to tap into the wealth of the wealthiest Americans because much of their wealth does not come from taxable income.
Very wealthy Americans avoid taxes by accumulating wealth in stocks and real estate. Although the value of these assets tends to increase, owners do not pay capital gains taxes until they sell. When they die, their assets often pass to their heirs tax-free.
“A lot of income is not taxed at all,” Davis said. “That’s income that never shows up on tax documents. It just disappears into thin air.”
The total wealth of California’s billionaires increased from $300 billion in 2011 to $2.2 trillion in 2025, according to a fact sheet from billionaire tax supporters.
They call the tax an “emergency” to offset “catastrophic” cuts in federal funding for health care, food assistance and education under the Trump administration.
“My favorite solution is federal investment in health care to make it more affordable,” said Janelle Jones, a senior fellow at the progressive group Groundwork Collaborative. “But I don’t think that will happen.”
California billionaires are raising millions of dollars to fight a billionaire tax if it is placed on the November ballot, even as they consider moving to another state.
If voters approve it, observers say the billionaire tax will be the ultimate test of how much cities and states can tax their wealthiest residents — and whether taxpayers will stay there.
