Tax the rich! |
Has there ever been an easier message to sell? Especially to the vast, vast, vast majority of us who know we’ll never be “the rich”? |
Let me put it another way. If I offered you a billion dollars right now but reminded you that you’d have to pay taxes, is there any chance you’d turn it down? |
I’ll pause here until you stop laughing. |
And yet, despite everything it seems to have going for it, Proposition 40 — a one-time, 5% tax on the net worth of billionaires that appears on the November ballot — doesn’t seem to have overwhelming support among California voters. |
According to my colleagues Seema Mehta and Nicole Nixon, only 45% of likely voters backed the measure in a late September poll by UC Berkeley and the Los Angeles Times. And that’s down 3 points from a poll taken six weeks earlier. |
“I think it’s very questionable if it passes,” Mehta told me yesterday. |
Why is Prop. 40 struggling? |
The most obvious explanation is the avalanche of cold, hard cash flowing into the coffers of the opposition campaign: Building a Better California. Opponents include Google co-founder Sergey Brin, who had dumped more than $100 million into the effort as of early August, with a long list of other tech billionaires chipping in as well. |
The war chest has only grown since then. “I was adding up the numbers yesterday and it was more than $300 million,” Mehta said. “I was like, ‘Oh my god, that’s insane!’” |
For comparison, former EBay chief executive Meg Whitman spent less than half of that when she self-funded her unsuccessful campaign for California governor in 2010. |
But it isn’t just the ultra-rich who are lining up in opposition. A surprisingly large coalition of Democrats and left-leaning interest groups have also come out against the proposal. The politically powerful California Teachers Assn. is against it; so are the California Professional Firefighters and Planned Parenthood. |
The brainchild of the proposition |
One reason is that the proposition is generally considered the brainchild of Dave Regan, president of the SEIU - United Healthcare Workers West. If it passes, almost all of the billions of dollars in potential proceeds would go to cover healthcare costs and by extension, to his union members in the form of more secure jobs and livable salaries. |
All good, until you realize that leaves members of other politically savvy California unions out in the cold — a situation they’re not accustomed to and clearly don’t appreciate. |
Then there’s the question of whether the billionaires — there are about 200 of them in California, more than any other state — would find ways around the tax. |
Again, I’ll pause so you can stop laughing. |
How billionaires may avoid Prop. 40’s sting |
Dodging taxes is like a parlor game for the very rich, many of whom would rather spend their money on enterprising accountants and tax attorneys. |
For example, the tax would apply to any billionaire who lived in California on Jan. 1, 2026. That already sparked a rich-guy race to set up plausible alternative residences elsewhere in the country. Miami, with no state income tax, has become a favorite refuge. And the retroactive nature of the proposal raises potential constitutional questions that some rich folks would be only too happy to test in court. |
Expect lawsuits, lots and lots of lawsuits. |
And then there’s the question of assessing net worth. Stocks and bonds are pretty easy to add up, but what about the value of a startup company that’s not listed on the stock market? Or an art collection? Or a charitable foundation? If the measure passes, expect a highly spirited game of hide-the-loot. |
All of which leaves a lot of people wondering: Is it worth the effort? |
They have different reasons, but it seems telling that Gov. Gavin Newsom and both candidates to replace him, Democrat Xavier Becerra and Republican Steve Hilton, all say no. |
Top stories |
 |
A man jogs near the Ferry Building in San Francisco. (Josh Edelson / For The Times) |
Young people are fleeing L.A. for some surprising places |
|
|
A rabid raccoon case in L.A. County |
- L.A. County officials have detected rabies in a raccoon, the first case since 1973.
- Health officials are reminding residents and their pets to be safe around wild animals, as an infected animal can pass rabies to another animal or to a person through its bite.
|
Luxury-car buyers are the target of a new law |
- Gov. Gavin Newsom signed legislation last week cracking down on the practice of luxury-car buyers in California registering cars out of state to avoid taxes.
- Senate Bill 1406 closes the so-called Montana loophole, in which tax evaders create shell companies in Montana or other states without sales tax or vehicle registration fees and use them to purchase Ferraris, Porsches and other luxury cars.
|
|
|
More news |
|
|
Commentary and opinion |
|
|
|
|
Editor’s pick |
|
Guojun Xuan, 66, and Silvia Zhang, 39, were charged Tuesday with conspiracy to commit child abuse a year after police rescued 14 of their biological children. |
|
 |
|
More picks |
|
|
Keep up with California |
Your support helps us deliver the news that matters most. Subscribe to the Los Angeles Times.
|
|
|
|
|
|
Things to do |
 |
Disneyland’s 2026 price increases are relatively light. (Christina House / Los Angeles Times) |
|
|
Today’s recipe |
 |
Salted caramel apples. (Kirk McKoy / Los Angeles Times ) |
Along with candy corn, the candy-covered apple is a Halloween staple. Caramel apples are probably the easiest ones to make: Take a crisp apple and swirl it with a coating of rich caramel. You can easily make your own caramel from scratch, using just a handful of ingredients. |
Question for you |
What’s a television show that takes place in California that you’d recommend to friends? |
Miri H. says, “‘Lucifer.’ It shows the beauty, drama and eccentricity of L.A. with a bit of an angel twist!” |
Email us at essentialcalifornia@latimes.com, and your response might appear in the newsletter this week. |
Photo of the day |
 |
The Box Springs Mountain Reserve, in the hills above UC Riverside, is home to several hundred wild donkeys. They have been embraced as an unofficial mascot on campus, but the animals’ relationship with residents in the surrounding hillside communities of the Inland Empire is more complicated. (Stan Lim) |
Games |
 |
Here’s today’s mini crossword, plus our other free, daily crossword puzzle, sudoku, word search and jigsaw games. |
Have a great day, from the Essential California team |
Jack Dolan, investigative reporter
Hugo Martín, assistant editor, fast break desk
Kevinisha Walker, multiplatform editor
Andrew Campa, weekend writer
Karim Doumar, head of newsletters |
How can we make this newsletter more useful? Send comments to essentialcalifornia@latimes.com. Check our top stories, topics and the latest articles on latimes.com. |
No comments:
Post a Comment