Even Gavin Newsom knows his wealth-tax flip-flop – Latest News
Gov. Gavin Newsom appears to know the folly of a wealth tax in California, but he’s immediately pushing one for the entire nation.
Sorry, Gav — you had it proper the primary time: It’s unhealthy in your state and for the nation.
Newsom has opposed a California poll measure that will slap a one-time 5% tax on residents whose web price exceeds $1 billion.
Not even an offer from SEIU-United Healthcare Workers West, which proposed the measure, to scale back the tax fee from 5% to 2% satisfied him the plan would work.
Clearly, he knows such a tax would drive billionaires out of the state, undermining California’s economic system.
Indeed, the mere proposal, which obtained over 900,000 signatures, already has the uber-rich heading for the exits.
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Google co-founder Sergey Brin moved 15 of his LLCs out of state. DoorDash co-founder Andy Fang referred to as the levy “stupid” and stated it could be irresponsible for him to remain if it handed.
Ex-Uber boss Travis Kalanick skedaddled to Austin, Texas, in December to keep away from the tax.
Yet now that he’s eyeing a run for president in 2028, Newsom needs of us to imagine a national wealth tax received’t push of us overseas. Big mistake.
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Palantir Chairman Peter Thiel not too long ago purchased real estate in Argentina, looking for refuge partially simply from Cali’s billionaire tax — even after he spent $3 million to oppose it.
Other billionaires are equally eyeing Latin America for its decrease taxes.
Felipe Silva, a Uruguay–based mostly adviser with real-estate firm Engel & Völkers, says Uruguay is attracting the rich, notably from California and New York, due to its its business climate and security.
Note, too, that wealth taxes haven’t performed nicely for nations that attempted them.
Of the 12 Organization for Economic Co-operation and Development international locations that imposed them within the Nineties, eight in the end rescinded them — as authorities revenues fell short, their economies suffered and administrative duties proved daunting.
In 1997, Germany declared its wealth tax unconstitutional. In 2021, the Netherlands ruled it violated European property-rights law.
Such a tax could be unconstitutional in America, too.
As for claims about equity: The top-earning 1% of Americans are already overtaxed, accounting for 40% of federal income taxes, whereas incomes simply 22% of income.
By comparability, the underside half account for simply 3%.
Newsom’s sudden shift might play nicely with Democrats’ tax-the-rich crowd, nevertheless it received’t help with anybody who understands economics — and precise equity.
