California Certified a Billionaire Wealth Tax. The Ground Can’t Run Away

The Golden State has now approved a Billionaire Wealth Tax for voters to decide this November. It calls for a one-time charge of 5 percent on California’s wealthiest citizens, to be settled gradually across five years. That would bring in roughly $20 billion annually to support health care, food aid, and schools, following federal reductions. With the state facing a shortfall, those at the top of the income ladder have the means to contribute toward closing it. Yet the measure will not succeed, and the explanation is straightforward: while land stays fixed where it sits, billionaires possess the ability to move elsewhere.

Key Facts Box

• Billionaire Wealth Tax: one-time 5 percent charge, spread over five years
• Annual target: $20 billion
• Land value in California: roughly $8.14 trillion
• Proposition 13 assessed value gap: 44–60 percent of actual worth
• Land value tax rate to match target: 0.25 percent
• Bay Area land value: second-highest in the state
• Los Angeles County land value: exceeds the entire billionaire base the wealth tax targets

Land Is Worth More Than You Think

A new report from the Center for Land Economics has put a dollar figure on every piece of land in California. The total comes to roughly $8.14 trillion dollars. Three separate approaches — federal housing-finance data, sales figures tracked over time, and the report’s own parcel-by-parcel methodology — all arrive at a similar range. This appears to be the first attempt to estimate California’s land value with a bottom-up approach that has held up to scrutiny.

The amount at issue is roughly eight times what the state can realistically tax in billionaire wealth, with Los Angeles County’s land alone worth more than the entire billionaire base the wealth tax is chasing. The Bay Area comes in a close second.

A billionaire can relocate to Austin. They can shift their portfolio within hours, but they cannot move their land, which remains fixed to the ground.

The Wealth Has Already Left

The tax on wealth assumes a base of $2 trillion. That figure is a nearly 2x overestimate because of people leaving the state to avoid taxes. Before the measure’s January 1, 2026 deadline, six California billionaires — Larry Page, Sergey Brin, Peter Thiel, Don Hankey, Travis Kalanick, and Steven Spielberg, with a combined fortune of roughly $540 billion — had already changed where they pay taxes. Mark Zuckerberg (about $220 billion) followed in early 2026 and will likely challenge the retroactive reach in court. Other economists have noted a roughly $200 billion overestimate in the proposal’s own model, which means nearly half the assumed base has vanished.

For the fund to still hit its $20 billion target given how much has already been spent, the tax rate on income would need to move upward, from 1 percent toward either 1.6 or 1.9 percent, depending on whether Zuckerberg wins his legal case. That outcome gives the remaining billionaires even more reason to depart, just as their neighbors have done. The trouble with taxing a few highly mobile individuals is plain: raise the rate to catch those who fled, and you end up pushing out the ones who stayed behind.

A Quarter of a Percent Works Better

A land value tax of just 0.25 percent would raise the same $20 billion a year the wealth tax promises. It does so on a base eight times larger, one that grows with California’s economy instead of fleeing it, and one that cannot move. Go bigger and the math still holds: a rate of about 1 percent would cover California’s entire $87 billion health and human services budget, in perpetuity.

A land value tax works like a regular property tax, except it applies only to the worth of the ground beneath a building, leaving the building itself untaxed. It cannot be avoided through abandonment, and it cannot be shifted onto tenants. The tax collects back the profit that comes from public improvements: when the government builds a transit line, the land around it gains value, and the tax takes some of that gain back from the public that paid for the improvement.

The concentration of land value means the weight falls heaviest on the prime coastal lots and downtown blocks owned by those with the most. A working family’s house in the Central Valley feels almost none of it. The tax thus reaches the wealthy without chasing them down.

The Real Problem Is Fifty Years Old

This isn’t actually about billionaires. California turns to strange taxes because its ordinary tax has been ruined since 1978, and it keeps reaching for something else instead.

Proposition 13 set a cap on property taxes and locked in assessed values until a sale takes place. That means a longtime resident pays far less than the young family next door does for an identical house. Our estimate puts California’s current assessed value at somewhere between 44 and 60 percent of actual worth. Put another way, the state has quietly decided not to collect on roughly half its own real-estate base.

Income taxes rose as property revenue declined, and they kept rising until California became the state with the highest income tax rate in the country. Now the revenue base walks out the door whenever it gets squeezed, and the wealth tax is the latest attempt at a squeeze — one that does nothing to fix the broken foundation beneath.

Everyone Is Running From the Best Tax

Everywhere, the same error is being repeated. Land value taxation comes as close as economics does to offering a free lunch, yet from Florida to California, no one is paying attention to it.

The Sunshine State is attempting to eliminate its property tax. Critics say replacing that income would require nearly doubling the state’s sales tax, which trades off a levy that doesn’t distort the economy for one that hits every purchase working families make. The Golden State, meanwhile, is adding a new tax on mobile billionaire wealth on top of its own broken property tax. Neither plan matches what sits directly beneath their feet.

California’s true taxable fortune lies beneath it, fixed and vast, enriched by the contributions of everyone, and utterly unable to flee to Miami.

A one-time tax on billionaire wealth is being proposed at 5 percent, with payments spread across five years. The goal is to raise $20 billion annually for health care, food aid, and schools. An estimate puts the value of all land in the country at $8.14 trillion. Because the property tax base is underassessed by 44–60 percent of its true worth, a land value tax rate of just 0.25 percent could produce the same amount of revenue instead.

Zuckerberg moved his tax residence outside the state early in 2026, after a cutoff date of January 1, 2026. That sequence places the move between the cutoff and the completion of the ballot certification in November.

What looks like a fix is actually a trap. The billionaires left behind will track the rising rate and choose whether to stick around or leave. In either case, the state comes up short. California is pursuing wealth that can move, while the ground beneath it is the one thing that cannot run.

Timeline

The timeline shows the sequence of events that have already reshaped the wealth base the tax was built to capture.

Source material: “California is chasing wealth that has feet,” landeconomics.org.

billionaire tax · California politics · land value tax · property tax · wealth inequality