California admits ‘billionaire tax’ would sink state revenues as advocates cleared to gather signatures

While supporters argue California’s controversial wealth tax would rake in tens of billions of dollars in revenue, the state’s own Attorney General Rob Bonta is making sure voters understand that the long-term impact will likely be the exact opposite.

In order for the ballot measure in California to start collecting enough signatures with the hopes of getting on the November ballot, it has to first receive a title and summary from the Attorney General.

Bonta notes that the “2026 Billionaire Tax Act” would result in a “temporary increase” in tax revenue of billions of dollars spread out over a few years, but goes on to add that it would also create a “likely ongoing decrease in state income tax revenues of hundreds of millions of dollars or more per year.”

But even as the state admits that a wealth tax would drain tax revenue year-over-year, socialist Senator Bernie Sanders from Vermont is throwing his full support behind the bill and even plans to introduce a national wealth tax modeled after the one in California.

“I strongly support the grassroots effort in California to impose a 5% wealth tax on 200 billionaires worth $2 trillion,” Sanders said in a post on X. “This is a model that should be emulated around the country, which is why I will soon be introducing a national wealth tax on billionaires.”

Sanders also tipped his hat to Californian Rep. Ro Khanna for supporting the ballot measure—the Democratic congressman ignited a heated debate earlier this week for taking aim at tech billionaires who threatened to leave the state over the 5% tax.

“I echo what FDR said with sarcasm of economic royalists when they threatened to leave, ‘I will miss them very much,’” Khanna wrote in a social media post.

Bill Ackman, a prominent hedge fund manager who made his billions in the stock market, agrees that some of the ultra-wealthy are skirting the tax system, but argued a wealth tax is not the solution.

“It would be catastrophic to California,” Ackman told The Post. “Every successful founder, entrepreneur would leave. Literally no one would stay.”

Instead, Ackman proposed closing the tax loophole known as “Buy, Borrow, Die,” which allows extremely wealthy individuals to live off loans secured by stock in a company.

“Effectively you can live an extraordinarily, you know, lavish life, and not pay tax if you just borrow against appreciated stock and that just doesn’t sound fair,” he told The Post.

Ackman suggested that those loans should be taxable as if you sold the same dollar amount in stock. At least one other high-profile billionaire told The Post he supports the idea.

As for Ackman’s prediction, it’s already coming to fruition with multiple sources telling the Post that billionaires are actively making plans to leave California.

Peter Thiel, the co-founder of PayPal, is opening a new office in Miami as reports surface that he is especially irked by the 5% wealth tax that could hit him with a $1.2 billion bill, according to a Wednesday press release.

Alex Spiro, the attorney for Tesla CEO Elon Musk, is also voicing his frustration on behalf of the tech giant—urging Governor Gavin Newsom, who disapproves of the idea, to scrap it altogether.

The billionaire tax “will trigger an exodus of capital and innovation from California,” Spiro wrote in a Dec. 11 letter to Newsom, which was obtained by Business Insider and confirmed by The Post.

“Our clients have made clear they will permanently relocate if subjected to this tax,” Spiro wrote on behalf of unnamed billionaire clients.

The proposed tax — championed by labor union SEIU-United Healthcare Workers West — needs about 870,000 signatures to qualify for the November 2026 ballot.