Horrible billionaires tax defeated in liberal California

Well, as I said yesterday, there’s no way to sugarcoat the results of the midterms elections: it was a bloodbath for Republican candidates and a major triumph for Democrats all over the electoral map. But it was not necessarily a triumph for Democratic ideas. Their candidates won absolutely everywhere, even in deep-red states like Texas and Kansas, but their policy proposals did not fare as well.

Take, for instance, the absolutely awful billionaires tax placed on the California ballot by labor groups who were desperate to wring even more money out of Silicon Valley’s successful tech entrepreneurs. That initiative was defeated ! Imagine that: On a night where Democrats everywhere racked up double-digit wins over their Republican opponents, a quintessentially liberal idea lost in a very liberal state.

Proposition 40 was a one-time 5 percent tax on wealthy Californians, which would apply retroactively to anyone who had lived in the state in the past year. That’s so backward that it actually drove several billionaires to flee the state already. In that sense, the damage is done. Even so, it’s nice to know there are limits to what Californians can stand.

And in addition to that, Proposition 42 passed. That measure actually makes it illegal for the state to implement a retroactive wealth tax. So voters clearly did not like this idea at all. Gov. Gavin Newsom understood this, which is why he opposed the measure.

Yet far-left Rep. Ro Khanna is actually chiding him for siding with the billionaires. He wrote on X:

“All of the polling shows nearly 70 percent of Democrats support Prop 40 to tax billionaires & pay for poor kids health. Newsom is aligning with mega Trump donors Sergey Brin & Peter Thiel and Republican voters to defeat it. This is about the soul of our party.”

Excuse me, Mr. Congressmen. This is not about the soul of your party. This is about the future of your state. It’s about California becoming the kind of place that demonizes wealth creation, and thus investment and innovation. What’s made California such a wealthy state is that a lot of very smart people moved there and started extremely successful businesses. You will break this model at your peril — they will move. They’ve already proven that they will.

But this is what the far left doesn’t understand. They think people will simply refuse to respond to incentives. But the fact is, if you make it cost-prohibitive to live in a certain place, people move. The weather is perfectly nice in Florida, after all. The kind of economic climate California has enjoyed is not a certainty. Bad lefty governance can ruin it. And then there will be less tax revenue to go around.

So I hope the Democrats keep that in mind as this new majority in Congress tries to decide what its priorities will be. President Trump signals that he wants to work with Democrats to pass legislation that serves the American people. To that I say: Great. Let’s do permitting reform. Let’s build more housing. Let’s bring back manufacturing where it’s possible to do so. Let’s do everything we can to empower our citizens to live the American dream.

That is not accomplished by plundering the coffers of the richest Americans, who already pay more than their fair share. It’s nice to see some sanity out of California for a change — they did not fall for the far left’s scheme.

Robby Soave is co-host of The Hill’s commentary show “Rising” and a senior editor for Reason Magazine. This column is an edited transcription of his daily commentary.