(The Center Square) – It appears that Facebook founder Mark Zuckerberg may be moving from California to Florida, where he bought a mansion.
The reason?
A ballot initiative in the Golden State to tax billionaires.
The proposal is sponsored by Service Employees International Union – United Healthcare Workers West. The SEIU UHW says its reason for the one-time tax is to “prevent the collapse of California healthcare and help fund public K-14 education and state food assistance programs.”
“The tax would be paid only by Californians worth more than $1 billion, which is about 200 people who hold a combined wealth of $2 trillion,” the union says on its campaign website.
The Center Square reached out to Meta, Facebook's parent company, to confirm reports that Zuckerberg plans to move to an island near Miami, but did not get a response before press time.
Susan Shelley, vice president of communications for the Howard Jarvis Taxpayers Association, does not doubt Zuckerberg is leaving. Shelley said there have been several tech billionaires who have bought homes in Austin and Miami.
There is no question that the billionaires' tax is the reason, Shelley told The Center Square.
“I think what alarmed them is that the Legislature did not stand up in unison and say ‘No, we’ll never allow this,’ so that kind of gave everyone the impression that if it’s not this, it’ll be something else," Shelley said. "But they’re absolutely targets of the Democrats in Sacramento."
Supporters of the tax are still collecting signatures to get it on the November ballot. Shelley is not sure that they will be able to make it, as they started late. However, if it gets on the ballot, Shelley said it will only require a simple majority for passage.
“They want to do a 5% seizure of the assets of 200 billionaires, and they want to use it for 90% health care and 10% education," she said. "And the reasoning seems to be that ‘the Trump administration something something something,’ and therefore they have to raise taxes."
U.S. Rep. Ro Khanna, D-California, favors the billionaires' tax.
When U.S. Sen. Ted Cruz, R-Texas, criticized the effort on X in late December, Khanna countered it's a matter of values.
“We believe billionaires can pay a modest wealth tax so working-class Californians have the Medicaid your party cut,” Khanna told Cruz in a post on X.
Still, Shelley said there's already “a very progressive income tax in California,” where 1% of the tax filers account for 45% of the state's personal income tax revenue.
Wayne Winegarden, a senior fellow in business and economics at Pasadena-based Pacific Research Institute, expects lawsuits to be filed if the tax is approved.
“It would be theoretically retroactive to January of this year, which I imagine would be challenged in court,” Winegarden told The Center Square. “For Zuckerberg, it may be too late as he was a resident of the state as of January, so, in theory, he would still be subject to it. But I imagine that would be challenged, and I think they would have a very good case to say that you cannot tax someone like that.”
Meanwhile, Winegarden said, “ballot box budgeting” will make it difficult for lawmakers to make spending plans.
“If you chase away these billionaires, you’re chasing away a substantial sum of our annual income tax revenues,” said Winegarden. “They think you’re going to raise a decent amount in the wealth tax, and perhaps you will. But you’re going to really destabilize the budget in the out years because you’ve chased away all this income and wealth.”
The personal income tax is the largest source of revenue in California. If the tax on billionaires is approved and drives more billionaires away, Shelley warned that it would reduce the amount of revenue that comes into the treasury.
Shelley advised people in other states to pay attention, because this is an entirely new kind of tax, and what often begins in California spreads to other states.
Winegarden agreed.
“This is not an example for other states to follow,” said Winegarden. “Not at all.”
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