tax

LDP looks set to secure 316 seats in Japan’s 500-member house, marking its best result since its founding in 1955.

Japan’s Prime Minister Sanae Takaichi has promised to cut taxes and keep her cabinet intact as she celebrated her Liberal Democratic Party’s (LDP) landslide victory in Sunday’s general election.

Takaichi’s pledge on Monday came as projections by the NHK broadcaster showed the conservative LDP securing 316 seats in the 500-member National Assembly and winning a “historic” two-thirds majority in the lower house.

The results marked the best result for the LDP since its founding in 1955, surpassing the previous record of 300 seats won in 1986 under then-Prime Minister Yasuhiro Nakasone.

LDP’s junior partner Japan Innovation Party won 36 seats, while the main opposition Centrist Reform Alliance managed to keep only 49 of the 172 seats it previously held.

Analysts credited the LDP’s triumph to the extraordinary popularity of Takaichi, who is Japan’s first female leader, and say it will allow her to pursue significant changes in Japan’s security, immigration and economic policies.

In a televised interview with NHK on Monday, Takaichi said she will emphasise policies meant to make Japan strong and prosperous.

She told NHK that she will push for the reduction of consumption taxes as promised by the LDP. During the campaign, the governing party had said it would ease household living costs by suspending the 8 percent food sales tax for two years.

“Most parties are in favour of reducing the consumption tax, such as reducing the tax on food items to zero, or to 5 percent, or reducing the tax on all items to 5 percent,” Takaichi said.

“The LDP has also campaigned for a consumption tax cut. I strongly want to call for the establishment of a supra-party forum to speed up discussion on this, as it is a big issue.”

Takaichi also indicated that she will not make any changes in her cabinet, calling it a “good team”.

The head of Japan’s top business lobby, Keidanren, also welcomed the result, saying it will help in restoring political stability.

“Japan’s economy is now at a critical juncture for achieving sustainable and strong growth,” Yoshinobu Tsutsui said.

United States President Donald Trump, who endorsed Takaichi ahead of the election, congratulated Takaichi in a post on social media and wished her “Great Success”.

South Korea’s President Lee Jae Myung also offered his congratulations and said he hoped to see her soon in Seoul.

The leaders of India, Italy and Taiwan also welcomed Takaichi’s win.

Al Jazeera’s Patrick Fok, reporting from Tokyo, said the message from Taiwan’s President William Lai Ching-te to Takaichi could upset China.

“Remember that Takaichi triggered Chinese anger after suggesting that Japan might intervene in the event of a Chinese attack on Taiwan,” he said, referring to the diplomatic storm the Japanese leader set off last year shortly after taking office.

“How she handles that relationship between Tokyo and Beijing is likely to define Japan’s foreign policy,” Fok added.

China regards Taiwan as part of its territory and has been keeping a close eye on Takaichi and the results of the polls.

The strong mandate for Takaichi could also accelerate her plans to bolster military defence, which Beijing has cast as an attempt to revive Japan’s militaristic past.

“Beijing will not welcome Takaichi’s victory,” said David Boling, principal at the Asia Group, a firm that advises companies on geopolitical risk.

“China now faces the reality that she is firmly in place – and that its efforts to isolate her completely failed,” Boling told the Reuters news agency.

SAN FRANCISCO — As California struggles with homelessness and healthcare cuts, some activists are taking on an unexpected cause: fighting for billionaires.

About a dozen people took part in the “March for Billionaires” on Saturday morning in San Francisco to raise awareness about the plight of the ultrarich. Although some assumed the event was satire, organizer Derik Kauffman said it was a sincere protest against a potential new tax on the state’s wealthiest residents.

“We must not judge billionaires as a class but by their individual merits,” he said, speaking outside the San Francisco Civic Center. “There are good billionaires and bad billionaires, just like there are good people and bad people. California is extraordinarily lucky that this is where people come to start companies and build fortunes and we should do our best to keep it that way.”

The Billionaire Tax Act is a proposed state ballot initiative that would levy a one-time, 5% tax on the state’s billionaires to help offset recent federal cuts that have affected healthcare and food-assistance programs. The tax would apply to their overall net worth but would exclude pensions, real estate and retirement accounts.

Supporters say it would benefit the majority of the state’s residents and help ensure billionaires pay their fair share. Opponents — including Gov. Gavin Newsom — argue it will cause billionaires and the businesses they own to flee the state, taking jobs and tax dollars with them.

Kauffman echoed those concerns Saturday and said everyone should want billionaires to remain in California.

“This tax will drive billionaires out; it already has,” he said. “The founders of Google — they left the state and they are taking their money with them.”

Google is still headquartered in California, but other companies tied to Google co-founders Larry Page and Sergey Brin recently lef the state, including T-Rex Holdings, which moved from Palo Alto to Reno last year.

San Francisco Jan. 7, 2026 Two counter-protesters mockingly impersonated billionaires by playing characters they dubbed “Oli Garch” and “Trilly O’Naire.”

(Katie King / Los Angeles Times)

The event attracted a few dozen humorous counterprotesters.

Razelle Swimmer carried around a puppet of the Swedish Chef from the Muppets, brandishing knives and wearing an apron that said “Eat the Rich.” Swimmer told The Times she doesn’t believe billionaires need more protections.

“If they aren’t willing to pay more taxes, then I don’t really care if they leave,” she said.

Other counterprotesters mockingly impersonated billionaires by donning crowns or top hats. A man and woman, playing characters called Oli Garch and Trilly O’Naire, said they worried what would happen if the tax passed.

“There is a small chance that my helicopter won’t be able to have a sauna in it just because apparently some kids want dental work or something,” said the woman, as she adjusted her tiara.

At one point, a man wearing a gold crown and carrying a sign that said “Let them eat cake” ran through the crowd shouting, “Keep the poors away from me.”

The Service Employees International Union-United Healthcare Workers West, the main backer of the tax proposal, needs to collect about 875,000 signatures by June 24 in order to get the measure on the November ballot.

The Legislative Analyst’s Office, which offers guidance to the Legislature about budgetary issues, has cautioned that the tax might lead to only short-term benefits.

“It is likely that some billionaires decide to leave California,” the agency stated in a recent analysis. “The income taxes they currently pay to the state would go away with their departure. The reduction in state revenues from these kinds of responses could be hundreds of millions of dollars or more per year.”

California has roughly 200 billionaires, the most of any state. Their collective wealth was $2.2 trillion in October, up from $300 billion in 2011, according to a December report from law and economics professors at UC Berkeley, UC Davis and the University of Missouri.

The researchers concluded that billionaires in the United States pay less in taxes, relative to income, than the average American.

“It is estimated that, including all taxes at all levels of government, billionaires paid only 24% of their true economic income in taxes in years 2018-20 while the U.S.-wide average was 30%,” the report states.

SAN FRANCISCO — Gov. Gavin Newsom, barred from running for reelection, still took heat Tuesday during the first debate in California’s 2026 race for governor.

Six Democrats and one Republican on the stage in Newsom’s hometown of San Francisco took direct aim at the governor’s record on homelessness, efforts to ban the sale of new gas-powered cars and opposition to an anti-crime ballot measure that Californians overwhelmingly passed two years ago.

Former Los Angeles Mayor Antonio Villaraigosa, who unsuccessfully ran against Newsom for governor in 2018, pointed to state spending on homelessness as an example of ineptitude.

“We spent $24 billion at the state, along with billions more from the counties and the cities throughout the state, and homelessness went on,” he said. “We cannot be afraid to look in the mirror.”

The televised debate revealed the schism between the moderate and progressive Democrats hoping to replace Newsom, as well as efforts by Steve Hilton, the sole Republican who took part, to coalesce the conservative vote.

Hilton, a former Fox New commentator and British political strategist, called on his top GOP rival, Riverside County Sheriff Chad Bianco, to drop out of the race.

“My Republican colleague Chad Bianco is not here tonight to face these Democrats or his record in 2020, during the Black Lives Matter riots,” Hilton said at the event, which was co-sponsored by the nonprofit Black Action Alliance, which was founded to give Black voters a greater voice in the Bay Area.

Bianco “took a knee when told to by BLM, now he says he was praying,” Hilton said. “Chad Bianco has got more baggage than LAX.”

Bianco was invited to the debate but said he was unable to attend because of a scheduling conflict. His campaign did not respond to requests for comment about Hilton’s attacks.

The, at times, feisty debate came amid a gubernatorial race that thus far has lacked sizzle or a candidate on either side of the aisle who has excited Californians. Public opinion polls show that most voters remain undecided.

Seven of the dozen prominent candidates running to replace Newsom participated in the gathering at the Ruth Williams Opera House in front of a live audience of about 200 people. Rep. Eric Swalwell (D-Dublin) was scheduled to participate but canceled, citing the need to go back to Washington, D.C., for congressional votes. Former Rep. Katie Porter (D-Irvine) also did not attend the debate.

The two-hour clash, at times plagued by audio issues, was hosted by two local Fox News affiliates and moderated by KTVU political reporter Greg Lee and anchor André Senior, as well as KTTV’s Marla Tellez.

Five takeaways from the debate:

Making California affordable again

When grilled about how they planned to tackle the high cost of living in the state — gas prices, rent, utility bills and other day-to-day financial challenges — most of the candidates prefaced their answers by talking about growing up in struggling households, often with immigrant parents who worked blue-collar jobs.

Former U.S. Health and Human Services Secretary Xavier Becerra said he would stabilize rents and freeze utility and home insurance costs “until we find out why they’re increasing.” California Supt. of Public Instruction Tony Thurmond said he would raise taxes on billionaires and create tax credits to help families afford the high cost of living.

Villaraigosa and Hilton said they would lower gas prices by cutting regulations on California’s oil refineries.

Hilton blamed the state’s high cost of living squarely on Democratic policies. “They’ve been in power for 16 years,” he said. “Who else is there to blame?”

Billionaire hedge fund founder turned climate activist Tom Steyer said he favors rent control. Steyer and former state Controller Betty Yee said they would prioritize zoning and permitting reform to build more housing, particularly near public transit. Both Steyer, a progressive, and San Jose Mayor Matt Mahan, a moderate, spoke about using new technology such as pre-fabricated homes to build more affordable housing.

Protecting immigrants

In the wake of the Trump administration’s chaotic immigration raids that started in Los Angeles in June and have spread across the nation — recently resulting in the shooting deaths of two people by federal agents in Minneapolis — the Democrats on stage unanimously voiced support for immigrants who live in California. Some pledged that, if elected, they would use the governor’s office to aggressively push back on President Trump’s immigration policies.

“We’ve got to say no to ICE, and we’ve got to take on Trump wherever he raises his ugly head,” Villaraigosa said.

Steyer, whose hedge fund invested in a company that runs migrant detention centers on the U.S.-Mexico border, and Thurmond both said they support abolishing Immigration and Customs Enforcement, and Thurmond and Mahan said they support a pathway to citizenship for undocumented immigrants.

Politicians politicking

Antonio Villaraigosa, left, talks to Betty Yee during the California gubernatorial candidate debate Tuesday in San Francisco.

(Laure Andrillon / Associated Press)

Amid the debate’s dodging, weaving, yammering and spicy back-and-forth, there were a few moments when the candidates rose above the din.

Villaraigosa, the former two-term mayor of Los Angeles and a former speaker of the California Assembly, insisted that the moderators call him “Antonio” instead of Mayor Villaraigosa.

“It’s my name, everybody. I’m just a regular guy,” he said, prompting a laugh.

Mahan, on the other hand, tried mightily to portray himself as being above the dirty business of politics.

“The truth is that our politics has been oversimplified,” he said. “It’s become this blood sport between populists on both sides, and you deserve real answers, not the easy answers.”

Yee, who has been running on her background as controller and a member of the California Board of Equalization, cast herself as the financial savior the state needs in trying economic times of budget deficits and federal cuts.

“We have not been accountable or transparent with our dollars for a long time,” she said. “Why are we right now and [in successive] years spending more than we’re bringing in? This is where we are. So accountability has to be a tone set from the top.”

The rich guy and the new guy

Steyer, who paints himself as a repentant billionaire devoted to giving away his riches to make California a better place for all, did not directly answer a question about his position on a controversial proposed ballot measure for a new tax on billionaires to fund healthcare. But he said he supported increasing taxes on the wealthy and boasted of having the political backing of bus drivers, nurses and cafeteria workers because he was the rich guy willing to “take on the billionaires for working families.”

Mahan, the latest major candidate to enter the race, wasn’t impressed.

“Tom, I’ve got about 3 billion reasons not to trust your answer on that,” he said, an apparent reference to Steyer’s net worth.

Although he supports closing tax loopholes for the wealthy, Mahan said he opposes the billionaire tax because “it will send good, high-paying jobs out of our state, and hard-working families, in the long run, will all pay more taxes for it.”

Money also spoke Tuesday

Although the battle over campaign fundraising didn’t overtly arise during Tuesday’s debate aside from Mahan’s comment about Steyer, it still was getting a lot of attention. Campaign fundraising disclosures became public Monday and Tuesday.

Unsurprisingly, Steyer led the pack with $28.9 million in contributions in 2025, nearly all of it donations that the billionaire spent on his campaign. Other top fundraisers were Porter, who raised $6.1 million; Hilton, who collected $5.7 million; Becerra, who banked $5.2 million; Bianco, who received $3.7 million in contributions; Swalwell’s $3.1 million since entering the race late last year; and Villaraigosa’s $3.2 million, according to documents filed with the California secretary of state’s office.

Mahan, who recently entered the race, wasn’t required to file a campaign fundraising disclosure, though he is expected to have notable support from wealthy Silicon Valley tech honchos. Former state Controller Betty Yee and state schools chief Tony Thurmond were among the candidates who raised the least, which spurs questions about their viability in a state of more than 23 million registered voters with some of the most expensive media markets in the nation.

Yee defended her candidacy by pointing to her experience.

“All the polls show that this race is wide open. You know, I think voters have had enough. I’ve been around the state. I’ve spoken to thousands of them,” she said. “Enough of the lies, the broken campaign promises, billionaires trying to run the world. You know, look, I’m the adult in the room. No gimmicks, no nonsense, straight shooter, the woman who gets things done. And we certainly can’t afford a leader who thinks grandstanding is actually governing.”

Mehta reported from Los Angeles and Nixon reported from San Francisco. Data and graphics journalists Gabrielle LaMarr LeMee and Hailey Wang contributed to this report.

SUNSEEKERS heading to Hawaii must now shell out more money to cover a tourist tax hike.

Government officials have praised it as a new “green fee,” but opponents have slammed it as a “surf tax” which bumps up accommodation prices.

Hawaii Gov. Josh Green signed legislation last May to generate an estimated nearly $100 million annually.

The “green fee” adds about $3 per night to your bill if you’re booking a $400-per-night hotel room, according to Aloha Hawaiian Vacations.

“Some are praising it as a much-needed environmental investment,” it added.

“Others feel like it’s just another added cost at a time when tourism still hasn’t fully bounced back post-pandemic.”

Forbes described it last month as a “first-of-its-kind visitor levy in the United States aimed at funding climate resilience and environmental conservation in the state.”

The levy raises rates on hotel room, vacation rentals and short-term rental stays.

The government also wanted to charge cruise line passengers, but the new charge is being challenged by industry officials in a lawsuit.

Money raised through the tax is to be invested in climate disaster resilience and environmental protection, according to the government.

“Visitors are willing to pay a climate impact fee in order to support Hawaiʻi’s environmental protection efforts and preserve the beauty and cultural heritage of the islands for future generations,” it explained last May.

SURF TAX

But, some tourists have resisted what they’re calling a “surf tax” said the Robb Report.

There’s also been some negative comments on social media, where it’s been slammed as a “money making” venture, and a “disgusting cash grab” which will “make Hawaii even more unaffordable.”

“We have no emissions testing on cars in Hawaii, but now we’re suddenly concerned about pollution and are going to place a climate tax on tourists?” asked one resident.

“This is about greed and incompetence, not the environment.”

Hawaii does not require a mandatory tailpipe emissions test – also known as a “smog check,” for vehicle registration, said Engineer Fix.

“Unlike many states that quantify pollutants like hydrocarbons and nitrogen oxides, Hawaii does not perform this type of performance-based assessment.”

Visitors have been charged the new levy since January 1, after it was signed into law last May.

The tax was prompted by recent natural disasters, including the 2023 Maui wildfires that killed more than 100 people and destroyed thousands of structures.

It raises the state’s transient accommodations tax (TAT) by 0.75% for a total of 11% placed upon the nightly lodging rate, said the governor last May.

Prior to its approval, officials had signaled hopes to slug tourists $40 to raise “$200 million in conservation workforce revenue.”

However Senate Bill 1396 instead increased the TAT rate by a more modest 0.75% – rather than a higher fee.

Supporters are thrilled that money raised will be spent on projects such as replenishing beach sand, coral reef rehabilitation, plus fire prevention projects.

“As an island chain, Hawaii cannot wait for the next disaster to hit before taking action,” said Gov. Green last June.

“We must build resiliency now, and the green fee will provide the necessary financing to ensure resources are available for our future.”

The cruise ship industry has managed to avoid the fee – for now.

An 11th-hour reprieve was granted by the federal appellate court, reported Civil Beat on January 1.

“Judges upheld the cruise industry’s request that its ships not have to pay the new fee while in port — or to pay any of the visitor taxes already charged to hotels and vacation rental owners — while the battle over their inclusion plays out in court.

“That means Hawaii will see a 10% decrease in expected revenue from the nation’s first green fee while the injunction is in effect.

“That reduction would become permanent if the industry’s main trade group, Cruise Lines International Association, prevails in court.”

Reporting from Sacramento — Soda companies got a respite last week from battling local taxes on sugary beverages, after California lawmakers grudgingly passed a 12-year ban on cities and counties imposing the levies.

That reprieve might be short-lived.

Major healthcare groups announced Monday that they will pursue a statewide soda tax initiative on the 2020 ballot to pay for public health programs. And in another jab at the beverage industry, the initiative would enshrine in the California Constitution the right of local governments to impose soda taxes.

“Big Soda has been a major contributor to the alarming rise in obesity and diabetes,” said Dustin Corcoran, chief executive of the California Medical Assn., a principal backer of the initiative. “We need to address this crisis now, and this initiative gives voters a real opportunity to do that.”

The proposed 2-cents-per-fluid-ounce tax would mean an additional 24 cents tacked onto the cost of a 12-ounce can, or an extra $1.34 for a 2-liter bottle sold in the state.

The proposal sets the stage for a marquee statewide battle between health groups and the soda industry — a feud that has been simmering in California’s cities and counties for years and burst into full view in the state Capitol last week.

California bans local soda taxes »

With the battle lines forming for 2020, the soda industry has had little time to savor its recent victory.

The companies won a 12-year ban on local soda taxes from legislators in exchange for a promise from business groups to withdraw a ballot initiative that would have required cities and counties to get supermajority approval from voters to raise any new taxes. That initiative, which had qualified for the November ballot, panicked mayors and labor groups representing local government workers with the prospect of a higher vote threshold that could stymie efforts to collect new tax revenue for cities and counties.

Minutes after Gov. Jerry Brown signed the bill that contained the soda tax ban, proponents pulled their broader tax initiative from the ballot.

The eleventh-hour deal infuriated public health groups and a number of legislative Democrats, who likened the soda industry’s leverage play to “extortion.”

“We were disappointed that the American Beverage Assn., and their member companies, went to such great lengths to take away the right of Californians to vote for better health,” said Nancy Brown, chief executive of the American Heart Assn.

But the maneuver prodded the California medical and dental associations to respond. The initiative, according to proponents, would raise between $1.7 billion and $1.9 billion in a statewide levy on soda and other sugary beverages, with money going toward programs to combat and prevent diabetes and obesity — both commonly linked to consumption of those drinks.

The tax would not apply to diet sodas, fruit and vegetable juices with no added sugar and drinks in which milk is the primary ingredient.

“Big Soda may have won a cynical short-term victory but, for the sake of our children’s health, we cannot and will not allow them to undermine California’s long-term commitment to healthcare and disease prevention,” Corcoran and Carrie Gordon, chief strategy officer of the California Dental Assn., said in a statement.

Brown of the American Heart Assn. said her group backs a statewide tax and efforts to roll back the local ban.

“We will be relentless in our work with communities across the state to improve public health through a statewide tax, and to restore the rights of Californians to vote for what they believe best supports health in their state,” she said.

The two organizations partnered with other public health groups, along with the Service Employees International Union, to successfully raise tobacco taxes by $2 per pack in 2016.

“Everyday grocery shoppers in California are struggling with affordability in the state — from housing to transportation to taxes. Rather than further driving up costs at the supermarket, we believe there is a better way for health advocates, government and California’s beverage companies to work together to help people reduce sugar consumption while at the same time protecting consumers’ pocketbooks and the small businesses that are so vital to our communities,” said William M. Dermody Jr., spokesman for the American Beverage Assn.

The soda industry has long fended off taxes at the state and local level. Berkeley became the first to pass a tax in November 2014 and since then, three other Bay Area cities — San Francisco, Oakland, and Albany — have imposed their own levies.

Until recently, the battle over a statewide soda tax had been fought — and won — by the industry in the Legislature. A recent legislative analysis counted proposals dating back to 1983 that had fizzled at some point during negotiations in Sacramento.

One recent effort was a 2013 bill by state Sen. Bill Monning (D-Carmel) to impose a penny-per-ounce tax, half the size of the tax under the proposed initiative. Assemblyman Richard Bloom (D-Santa Monica) sought a 2 cent-per-ounce tax in two successive bills in 2015 and 2016; both measures failed to advance.

“These products are dangerous,” Monning said last week during Senate debate over the bill that now bans local soda taxes. “We label and tax tobacco because we know what it does. We should label and tax these products and let people have informed choice.”

Times staff writer John Myers contributed to this report.

Coverage of California politics »

melanie.mason@latimes.com

Follow @melmason on Twitter for the latest on California politics.

Carney has been under pressure from the opposition to lower prices of food and other essentials for lower-income people.

Canadian Prime Minister Mark Carney has announced a multibillion-dollar package as part of a series of measures aimed at lowering the costs of food and other essentials for low-income families.

On Monday, Carney announced a five-year 25 percent boost to the Goods and Services Tax (GST) credit that starts this year.

The GST credit, which is being renamed the Canada Groceries and Essentials Benefit, will provide additional, significant support for more than 12 million Canadians, Carney said in a statement.

The government will also provide a one-time top-up equivalent to a 50 percent increase this year to eligible residents.

“We’re bringing in new measures to lower costs and make sure Canadians have the support they need now,” Carney said.

The measures would cost the government 3.1 billion Canadian dollars ($2.26bn) in the first year and between 1.3 billion Canadian dollars ($950m) and 1.8 billion Canadian dollars ($1.3bn) in each of the following four years, he told reporters at a news conference, according to the Reuters news agency.

While overall consumer price inflation in Canada has eased and came in at 2.4 percent for December, “food price inflation remains high due to global and domestic factors, including supply chain disruptions, higher US tariffs from the trade war and climate change/extreme weather”, Tony Stillo, director of Canada Economics at Oxford Economics, told Al Jazeera.

The government is also setting aside 500 million Canadian dollars ($365m) from the Strategic Response Fund to help businesses address the costs of supply chain disruptions without passing those costs on to Canadians, and will create a 150 million Canadian dollar ($110m) Food Security Fund under the existing Regional Tariff Response Initiative for small and medium enterprises and the organisations that support them.

Changing landscape

“The global landscape is rapidly changing, leaving economies, businesses, and workers under a cloud of uncertainty. In response, Canada’s new government is focused on what we can control: building a stronger economy to make life more affordable for Canadians,” Carney said.

The new measures were unveiled on the day Parliament resumes after its winter break.

Opposition parties have urged Carney to reduce prices of daily goods, especially as sections of the economy have come under pressure from United States President Donald Trump, who has slapped 35 percent tariffs on the country as well as separate tariffs on steel, aluminium and lumber, leading to job losses in those sectors.

Over the weekend, Trump escalated his threats and said he would impose a 100 percent tariff on Canada if it makes a trade deal with China. Carney has been working on diversifying Canada’s exports away from the US, its biggest trading partner and to which nearly 80 percent of its exports went last year, including by increasing business with other markets like China.

In the roiling debate over California’s proposed billionaire tax, supporters and critics agree that such policies haven’t always worked in the past. But the lessons they’ve drawn from that history are wildly different.

The Billionaire Tax Act, which backers are pushing to get on the November ballot, would charge California’s 200-plus billionaires a one-time, 5% tax on their net worth in order to backfill billions of dollars in Republican-led cuts to federal healthcare funding for middle-class and low-income residents.

Critics of the proposal have argued that past failures of similar wealth taxes in Europe prove they don’t work and can cause more harm than good, including by driving the ultra-rich out. Among those critics is San José Mayor Matt Mahan, a tech-friendly Democrat who is contemplating a run for governor.

“Over the last 30 years, we’ve seen a dozen European countries pursue national-level wealth taxes,” Mahan said. “Nine of them have rolled them back. A majority have seen a decline in overall revenue. It’s actually shrunk the tax base, not increased it, and it’s because it creates a perverse incentive and drives capital flight.”

Backers of the measure acknowledge such failures but say that they learned from them and that California’s proposal is stronger as a result.

Brian Galle, a UC Berkeley tax law professor and one of four academic experts who drafted the measure, said if it gets on the ballot, every voter in the state will receive a copy of the full text, a one-page explainer on what it does, and nearly two dozen additional pages of “rules for preventing wealthy people and their army of lawyers from dodging” it.

Many of those rules, he said, are based on historical lessons from places where such taxes have failed, but also where they’ve succeeded.

“If you understand the actual lessons of history, you understand that this bill is more like the successful Swiss and Spanish wealth taxes,” Galle said. “Part of that is learning from history.”

Warnings from Europe

Since the 1990s, several European countries have repealed net wealth taxes, including Austria, Denmark, Finland, France and Germany.

A major example cited by critics of the California proposal is France, which implemented a much larger wealth tax on far more people, including many millionaires. The measure raised modest revenues, which fell as rich people moved out of the country to avoid paying, and the measure was repealed by the government of President Emmanuel Macron in 2017.

In a 2018 report on net wealth taxes, the Paris-based Organization for Economic Co-operation and Development found that European repeals were often driven by “efficiency and administrative concerns and by the observation that net wealth taxes have frequently failed to meet their redistributive goals.”

“The revenues collected from net wealth taxes have also, with a few exceptions, been very low,” it found.

Critics and skeptics of the California proposal say they expect California to run into all the same problems.

Mahan and others have pointed to a handful of prominent billionaires who already appear to be distancing themselves from the state, and said they expect more to follow — which Mahan said will reduce California’s “recurring revenue” beyond the amount raised by the one-time tax.

Kent Smetters, faculty director of the Penn Wharton Budget Model, which analyzes the fiscal effects of public policies, said net worth taxes in other countries have “always raised quite a bit less revenue than what was initially projected,” in large part because “wealth is easy, as it turns out, to try to reclassify or move around” and “there’s all these tricks that you can do to try to make the wealth look smaller for tax purposes.”

A bus in London promotes a campaign by British millionaires advocating for an end to extreme wealth and inequality.

(Carl Court / Getty Images)

Smetters said he expects that the California measure will raise less than the $100 billion estimated by its backers because billionaire wealth in California — much of it derived from the tech sector — is relatively “mobile,” as many tech barons can move without it affecting business.

“Policymakers have to understand that they’re not going to get nearly as much money as they often project from a purely static projection, where they’re not accounting for the different ways that people can move their wealth, reclassify their wealth, or even just move out of the state,” Smetters said. “So far, we only know of a few people — with a lot of money — who have moved out of the state, [but] that number could go up.”

Kevin Ghassomian, a private wealth lawyer at Venable who advises rich clients, said he expects the administrative costs of enforcing the tax to be massive for the state — and much greater than the drafters have anticipated.

On the front end, the state will face a wave of legal challenges to the tax’s constitutionality and its retroactive application to all billionaires living in the state as of the end of 2025.

Moving ahead, he said, there will be litigation from wealthy individuals whose departure from California is questioned or who dispute the state’s valuation of their net worth or individual assets — including private holdings, which the state doesn’t have extensive experience assessing.

Valuating such assets will be “a nightmare, just practically speaking, and it’s going to require a lot of administrators at the state level,” Ghassomian said, especially considering many California billionaires’ wealth is in the form of illiquid holdings in startups and other ventures with fluctuating market valuations.

“You could be a billionaire today, and then the market plummets, and now all of a sudden, you’re a pauper,” he said. “It could really lead to some unfair results.”

Lessons from Europe

Backers of California’s proposal said they have accounted for many of the historical pitfalls with wealth taxes and taken steps to avoid them — including by making it harder for wealthy Californians to simply shuffle money around to avoid the tax.

“There are a lot of provisions that are designed based on what has worked well in other countries with wealth taxes in the modern era, especially Switzerland, and there are also provisions meant to shut down some of the holes in some of the earlier wealth tax efforts, especially the France one, that were viewed as not successful,” said David Gamage, a University of Missouri tax law professor and another of the proposal’s drafters.

Galle said the Organization for Economic Co-operation and Development study found that many of Europe’s historical wealth taxes “hadn’t figured out how to solve the problem of what small businesses were worth,” so were more narrowly focused on publicly traded stock and real estate. “Over time, there was a lot of abuse where people shifted their assets to make them look privately held.”

The California proposal “tries to solve that problem” by including small businesses and other privately held wealth in their calculations of net worth, he said — and benefits from the fact that such wealth has gotten a lot easier to track and appraise in recent years.

Doing so would be a familiar exercise for many California billionaires already, he said, as it is hard to raise venture capital, for example, without audited financial statements.

Backers of the measure said it is harder for U.S. citizens to avoid taxes by moving abroad than it has been for Europeans, and that evidence from Switzerland and Spain suggests differing tax rates between a nation’s individual states do not cause massive interstate flight.

San José Mayor Matt Mahan, who might run for governor, opposes the proposed tax on California billionaires.

(Rich Pedroncelli / Associated Press)

For example, each state in Spain sets its own wealth tax rate, and Madrid’s is 0% — but that has not caused an exodus from other parts of Spain to Madrid, Galle said.

The risk of California billionaires avoiding the tax by simply moving to another U.S. state was further mitigated by the measure’s Jan. 1 deadline for avoiding the tax. Galle said the deadline “was intended to make it more difficult for individuals to concoct the kind of misleading, apparent moves that wealthy people have used in other places to try to avoid a wealth tax.”

Gamage said that “history shows if a tax on the wealthy can be avoided by moving paper around, claiming that you live in another location without actually moving your life there, moving assets to accounts or trusts nominally in foreign countries or other jurisdictions, you see large mobility responses.”

But when “those paper moves are shut down,” there’s much less moving — and “that’s the basis for the California model,” he added.

The outlook

Ghassomian, who said he has been “fielding a lot of inbound inquiries from clients who are just kind of worried,” said it is clear that the proposal’s authors “have done their homework” and tried to design the tax in a smart way.

Still, he said, he has concerns about the cost of administering the tax outpacing revenues, especially amid litigation. Residency battles alone with billionaires whose claims of departing the state are questioned could take “years and years and years” to resolve, he said.

“The revenue has to line up with expenditures, and if you can’t count on the revenue because it’s going to be tied up in courts, or it’s going to be delayed, then I think that creates some real logistical hurdles,” he said.

Smetters said predicting revenues from a tax on so many different types of assets is “really hard,” but one thing that has generally held true through history is that “most countries, even with less-mobile wealth, typically do not get the type of revenue that they were hoping for.”

David Sacks, a venture capitalist and President Trump’s AI czar who decamped from California to Texas, said on the sidelines of the World Economic Forum in Davos, Switzerland, last week that the measure was an “asset seizure” more than a tax, and that the state would be headed in a “scary direction” if voters approved it.

Darien Shanske, a tax law professor at UC Davis and another drafter of the proposal, said he and his colleagues did their best to “look at the lessons of the past, and apply them in a way that makes sense and is generally fair and administrable” — in a state where wealth inequality is rapidly growing and a wealth tax presents unique opportunities.

“Having a tax on billionaires does make particular sense in California because of the large number that live here and the large number who have made their fortune here,” he said.

Shanske said the proposed tax is designed to provide California a way to “triage” soaring healthcare premiums resulting from legislation enacted by the Trump administration and congressional Republicans. The proposal asks for contributions from people who will quickly recoup what they are taxed given the exponential growth of their assets, he said.

Emmanuel Saez, director of the Stone Center on Wealth and Income Inequality at UC Berkeley and another drafter of the measure, said many of the repealed European taxes targeted millionaires while providing loopholes for billionaires to avoid paying, whereas California’s measure is “exactly the reverse.”

He said the measure will raise substantial revenue in part because California billionaire wealth more than doubled from 2023 to 2025 alone, and is “the innovative and first-of-its-kind tax on the ultra-wealthy that the moment requires.”

Thomas Piketty, a French economist and author of “Capital in the Twenty-First Century,” called California’s proposed tax “very innovative” and “relatively modest” compared with massive wealth taxes after World War II — including in Germany and Japan — and said it would not only improve healthcare in the state but “have an enormous impact on the U.S. and international political scene.”

“In the current context, with a deeply entrenched billionaire class, wealth taxes meet even more political resistance than in the postwar context, and this is where California could make a huge difference,” he said. “The fact of targeting the revenue to health spending is also very innovative and can help convince the voters to support the initiative.”

Times staff writer Seema Mehta contributed to this report.