Reason (magazine)

California lawmakers are considering a proposed 5 percent wealth tax on billionaires ahead of a vote, a measure that critics argue could drive out wealthy residents and ultimately cost the state tens of billions in lost revenue, according to a Hoover Institution study. Gov. Gavin Newsom has opposed the proposal. Commentators have drawn comparisons to France, where high taxes and expansive welfare and pension commitments have fueled unrest and economic stagnation, raising questions for other jurisdictions considering similar tax-the-rich policies as a long-term revenue strategy.

The debate comes as prediction markets watch California's fiscal policy and the broader 2026 midterm landscape, where tariffs, foreign policy, and corruption allegations could shape control of Congress.