California’s billionaire tax

Gabriel Zucman and Emmanuel Saez have a fascinating piece (gift link) on California’s proposed billionaire tax, which will be on the ballot in November. This is a one-time 5% tax on household wealth over one billion dollars. The value of non-rental residences doesn’t count, either, so this is unlikely to render Page, Brin, Zuckerberg, Ellison et al homeless.

Just a couple of numbers from the piece, which has great graphs to go along with it:

Inflation-adjusted, the wealth of the very richest residents of California (not the same people) increased by 73-fold between 1982 and 2026.

Mark Zuckerberg had an income of $2.8 million per day between 2019 and 2025. Assuming he spent 100% of this money, his personal fortune would have grown by $185 billion over those seven years. He “enjoyed” $143 billion in stock gains and $42 billion in retained profits over these years, to go along with $7.1 billion in reported income. This means that almost all of his money went completely untaxed, which is the situation with all these people.

A particularly fiendish little loophole in the tax code is that Zuckerberg can simply borrow, at rock-bottom interest rates, whatever money he actually spends against his capital, and as long as that capital grows faster than the interest he owes on the loans before he repays them, he will never pay any tax at all on that income.

The notion that unlimited personal wealth is compatible with anything resembling democracy is the kind of proposition you have to be mind-bogglingly stupid to consider plausible. The richest people in America are fifty times richer, literally, in real dollars than the richest people in America were when I was in college in the early 1980s. Another big difference is that I didn’t know the names of almost any of the latter people (I recognized Nelson and Bunker Hunt because of the fiasco when they tried to corner the silver market, plus I knew Lamar Hunt owned the Kansas City Chiefs), while I’m all too familiar with all of the schmucks profiled in this article, except for one of them (Huang).

Saez and Zucman do a good job responding to phony arguments about how this is all futile because these people will just flee the interview/jurisdiction. In short no they won’t because people don’t actually react that way to this sort of measure, and in any event it’s too late now because this is a one-tine tax on wealth as of 1/1/2026 so even if Larry Page wants to go to Katmandu because no one loves him here anyway that won’t effect the operation of the tax.

BTW this tax would raise $100 billion dollars to fund gaps created in California’s Medicaid system because of the rapacity of the plutocrats who bought Trump’s 2025 tax bill. And again this just a one-time tax, that will barely slow the growth of these men’s fortunes, let alone actually affect their economic circumstances in any measurable way. They’re against it because they’re pathologically addicted to wealth accumulation, and their addiction needs far more radical treatment than this, but this is the beginning of a good start.

. . . funny/not funny illustration of the problem here: A commenter tried to make a mathematical correction, pointing out that when I claimed Zuckerberg’s income was $2.8 million a day between 2019 and 2025 I was mis-stating the facts, since that was the daily increase in his wealth, which wasn’t taxable. No! His INCOME was $7.1 billion over seven years, which is $2.8 million per day. His WEALTH increased by $192 billion, which is $75 million per day.