This November, Californians will be voting on the “2026 Billionaire Tax Act,” a new wealth tax that would essentially seize 5 percent of the accumulated wealth of the state’s billionaires. Unlike a tax on income, sales, or property, this tax would target the non-liquid assets where the ultra-wealthy keep their fortunes.

Defending this new tax in an essay for The New York Times, economists Emmanuel Saez and Gabriel Zucman use Meta founder Mark Zuckerberg as an example. In terms of taxable income, Zuckerberg “reported more than $7.1 billion…$181 million in compensation, $1.4 billion in dividends and $5.6 billion in gains from selling stock.” Although the 27 percent that Zuckerberg pays on $7.1 billion (around $1.91 billion) sounds like a large enough sum, 5 percent of the $206 billion he is worth (over $10 billion) is obviously much more.

Unlike a tax on income, sales, or property, this tax would target the non-liquid assets where the ultra-wealthy keep their fortunes.Tweet This

Sheer unbridled envy is basically the main thrust of the whole essay, as the economists apply their calculations to other billionaires and stress just how much money the wealth tax could raise. As for the objection that this would drive away California’s richest residents, they respond that the wealth tax would bring in more money now than the current tax rate would bring in 25 years. Therefore, the short-term boost in revenue easily makes up for the long-term loss of these residents.

Moreover, the economists argue that it is more likely that these companies would not move since they evidently depend “on the pool of California’s tech talent and tech ecosystem” and “have accumulated enormous fortunes almost tax-free.” Although both of these points are easily refuted by several large California tech companies resettling in my own state of Texas because of high taxes, I would agree that leaving California, a beautiful state with near-perfect weather, would be difficult.

However, for all their number crunching and appeals to “fairness,” Saez and Zucman never morally or logically justify this new tax. They simply assume that funneling more money into the state government is unquestionably good and the existence of the ultrawealthy is unquestionably bad.

But why? At the moment, the California state government collects around $265 billion annually but has a $73 billion deficit. Sure, it could pay off this deficit by fleecing billionaires, just like a junkie can pay off the debts to his dealer by mugging some unsuspecting victim, but this does not address the deeper problem of unsustainable spending that is plagued with obscene amounts of fraud, waste, and abuse. Corruption doesn’t only exist at the top levels, after all.

As for the Marxist notion that billionaires need to “pay their fair share,” no one who advocates this position ever bothers to demonstrate how or why such fortunes are immoral or what a “fairer” distribution of wealth would be. As I wrote years ago, most of today’s richest people have become so by creating products and services that people value. Through their innovation, competence, hard work, and good fortune, they create wealth that benefits everyone. Additionally, their wealth goes on to produce more wealth in the form of investment, employment, production, consumption, and research and development.

Through their innovation, competence, hard work, and good fortune, they create wealth that benefits everyone…their wealth goes on to produce more wealth in the form of investment, employment… research and development.Tweet This

By contrast, government does not produce wealth. At best, it can enable wealth creation through building infrastructure, educating the populace, protecting private property, and administering justice. At worst, it does none of these things and shamelessly robs its citizens because it can. There is no incentive to create wealth but every incentive to devise “wealth taxes” on the flimsy pretext of achieving fairness.

And what is this “fairness”? It is the reallocation of wealth to unproductive functionaries and marginalized people—what writer Helen Andrews calls “race communism.” In California, fairness would mean transferring Mark Zuckerberg’s billions to useless bureaucrats in Sacramento, useless workers at various NGOs, and useless illegal immigrants from Somalia running hospice care scams.

Of course, what would work to fix this system is basic accountability—not a massive infusion of cash for the government. Saez and Zucman insist that the wealth tax would be a one-time occurrence, but they also attribute California’s debt crisis to the Trump administration cutting federal funds for Medicaid. Assuming such cuts are permanent and spending continues exceeding annual revenue, then their deficit will simply restart after being paid off—and thus necessitate yet another “one-time” wealth tax down the road. Worse still, spendthrift politicians will likely blow their wealth-tax windfall on even more reckless spending since this makes them popular with their constituents and gives them more power.

Once again, the analogy of a junkie applies: if a person has an expensive addiction putting him into debt and closer to death, giving him money will only prolong the problem and possibly kill him. So, too, will a state addicted to frivolous welfare programs remain insolvent and move ever closer to total bankruptcy. The vicious cycle can only stop when the vice driving the cycle stops.

Sadly, despite all this, the 2026 Billionaire Tax Act has a good chance of passing because it pits the multitudinous mob against the few unpopular elites remaining in California. Judging from the arguments given by Saez and Zucman, most people seem to see free money for the taking rather than a covetous policy that will cripple their economy and prevent necessary reforms. Perhaps Californians will come to their senses and reject this socialist siren song in November, but they will need some help from the rest of us to keep them from crashing against the rocks and sinking into oblivion.