California taxpayers, because a new wealth tax proposal could send shockwaves through the Golden State’s economy.
This brewing battle pits Elon Musk’s attorney, Alex Spiro, against a union-backed voter initiative to slap a 5% wealth tax on billionaires worth over $1 billion residing in California as of 2026, the New York Post reported.
For hardworking Californians, especially retirees on fixed incomes, this could mean a ripple effect of higher costs and reduced economic activity as roughly 200 ultra-wealthy individuals face a financial burden that might push them—and their businesses—across state lines.
The loss of billions in annual income, capital gains, and property taxes could hit local budgets hard, leaving less for schools, roads, and public safety. From a conservative standpoint, this smells like another overreach that demands full scrutiny, no exceptions.
The drama kicked off when Spiro, a high-profile lawyer representing clients like Musk and Jay-Z, penned a stern letter to Newsom on December 11, 2025, slamming the proposed tax.
This initiative, pushed by SEIU-United Healthcare Workers West, aims to fund health care and education gaps left by federal cuts, but it needs about 870,000 signatures to land on the November 2026 ballot.
Spiro didn’t mince words, arguing that this 5% levy on the state’s richest is nothing short of property confiscation that could force asset liquidations en masse.
“Will trigger an exodus of capital and innovation from California,” Spiro declared, painting a grim picture of billionaires packing up if this tax becomes law (Alex Spiro).
Let’s unpack that: if heavyweights like Google’s Larry Page, facing a potential $12 billion tax hit, or Peter Thiel, staring at $1.2 billion, bolt for friendlier states, California’s tax base could crumble overnight. From a right-of-center lens, this isn’t just bad policy—it’s a reckless gamble with the state’s future.
Spiro even urged Newsom to squash the signature drive, oppose the ballot qualification, and campaign against the measure, though the governor lacks direct power to halt it.
Newsom, for his part, has already voiced opposition, noting at a recent summit that most labor groups and nearly everyone he knows stand against this wealth tax.
“We have one individual that represents one labor union in the state of California that has not collected one signature that is considering putting on the ballot, after he collects signatures, a wealth tax that the vast majority of labor opposes and almost everybody I know opposes,” Newsom said (Gavin Newsom). While his heart might be in the right place, conservatives might wonder if he’ll fight hard enough against this progressive overreach.
Meanwhile, Elon Musk, who moved to Texas in 2020 after founding Tesla and SpaceX in California, looms large over this debate with his well-known frustration over the state’s heavy-handed regulations and liberal policies.
Adding fuel to the fire, Musk and Newsom recently sparred on social media over the governor’s support for progressive transgender legislation, showing how personal these policy fights can get.
Despite a 2023 joint appearance celebrating a Tesla AI site, their relationship remains tense, a reminder that even shared economic goals can’t bridge ideological divides. From a populist conservative view, it’s clear California’s leadership needs a reality check before chasing away its golden geese with ill-conceived taxes.
