THE VIEW FROM HERE - Proposition 40, The One-Time Wealth Tax measure, is much greater threat than even its opponents describe in their TV ads. It is first step of a national movement, supported by Far Left and Democrat Socialists of America (DSA), to allow the government to tax everyone’s wealth.
What Does Tax on Wealth Mean?
Income tax, for example, is based on how much money you earned in a year. If you have a bad accident or fall ill and your income crashes, so too does your income tax. A wealth tax does not care if your income drops to zero. If you lose your job, but you own a home, or have retirement plan, or are living off your diminishing savings, a wealth tax still demands payment. It will still levy a tax on everything you own. Thus, when you’re at your worst and struggling to save your house and provide food for your family, the wealth tax will demand taxes on everything you own. There are no deductions like one gets with income taxes. Theoretically, a wealth tax allows the government to monetize your dog and force you to pay taxes on his value.
Why Not Increase Income Tax on the Wealthy?
They do not increase income taxes on the super-duper wealthy because they have a long-range plan to tax everything you own. Prop 40 talks about the billionaires, but you are the real target. Prop 40 does not disappear after one year. It lasts forever and has a provision which allows the legislature to change the tax rate to whatever it wants: 5%, 7%, 10%, 20% of your total wealth. Don’t think it is limited to billionaires. If billionaires leave the state and the government wants more revenue from the taxing wealth of Californians, Prop 40 allows Sacramento to tax millionaires. Rather being limited to billionaires, in the future they can tax people with net worth of $100 Million, or $10 million, $1 million, or less. There is no limit on what Prop 40 can do in future years.
Let’s Look at a Reasonable Alternative
Before describing the national movement by the Far Left and the DSA to tax everything you own, let’s realize that a wealth tax is completely unnecessary. Look at Social Security. The annual contributions which people make to Social Security are capped at taxable income of $184,500. Above that amount, no additional tax is paid.
By allowing people who make $184,500.00 to stop making additional contributions, as their incomes rise, they pay an increasingly smaller share. Thus, the truly wealthy people are paying a much small percent of their income than the average American. The tax (contribution) rate is 6.2% for each employee plus their employer also pays 6.2%. Self-employed people pay the full 12.4% since they are both employee and employer. Since many multi-millionaires are self-employed, their maximum tax (contribution) is $22,878. The more money they rake in, the smaller their percentage contribution to Social Security. If someone makes $2 Million, his percentage contribution drops to 1.1439%. There is no logical reason not to do away with the $184,500.00 income cap for Social Security contributions. The wealthy have all their basic needs covered. While it is great that they are making a fortune, giving them a break when the entire social security system is underfunded is nonsensical. Thus, we can raise enough revenue to cover Social Security and Medicare by simply not giving the wealthy a break at taxable income above $184,500.00.
The Real Motive Behind the Wealth Tax
The real motive is to change the way the average man thinks about taxes. We mentally link taxes to certain events, primarily income, sales taxes, and now tariffs. Once we own something, however, it is ours and we do not continue to pay for it. Property taxes are an exception, and they come with a terrible evil; as people become older and their incomes drop, they could not afford ever escalating property taxes and they would lose their homes after having worked 30, 40, or even 50 years to have security in their old age and home equity to pass on to the next generation. That was the cause of Prop 13 which capped property taxes. Prop 13 saved untold families from losing their homes because property taxes no longer grew way beyond their means to pay.
Presently, Angelenos intuitively know that a wealth tax on property is a direct threat and that is why we passed Prop 13. Prop 40's goal is to undo the widespread dislike of wealth taxes and subvert Prop 13. While the DSA and other far leftists pretend that Prop 40 is a one-time tax on Billionaires, once passed, it can become a tax on everything we own! If you doubt the motives behind Prop 40, read October 4, 2026. The New Yorker Magazine, The New Yorker Magazine, The Battle To Pass the Billionaire Tax, also entitled For Richer. The goal is to have a national wealth tax on all private property in the country, and they believed that Prop 40 in California is a great first step. In 1819, Chief Justice Marshall wrote that “the power to tax involves the power to destroy.” McCulloch v. Maryland (1819).
Under Prop 40 and the proposals for a national wealth tax, the tax can be so high within a few years, the wealth tax can destroy everything one owns. Also remember, with income taxes you are bringing in money owed on your Form 1040, but with Prop 40, many people lack the ready cash to pay taxes on everything. Suppose you own $50,000 in stocks but you’re out of work, how do you get the money to pay the tax. Suppose you invested in a lot in the desert in hopes that someday population will expand in that direction. With a wealth tax, you would have to pay not only property taxes but also the wealth tax each and every year.
Their Plan Is a Sly One
They deceive you into thinking that is only a one-time tax on multi-billionaires to cover health care costs, which sound so good. Once, it is passed it can be used to tax anything and everything you own. They did not add that provision by accident. The government’s ability to change Prop 40 any which way they please in future years is the real reason behind Prop 40. The New Yorker article makes their true motive crystal clear.
(Richard Lee Abrams is a former Los Angeles-based attorney, an author, and political commentator. A long-time contributor to CityWatchLA, he is known for his incisive critiques of City Hall and judicial corruption, as well as his analysis of political and constitutional issues. Abrams blends legal insight with historical and philosophical depth to challenge conventional narratives. A passionate defender of civic integrity and transparency, he aims to expose misuse of power and advocate for systemic reform in local government. You may email him at [email protected])
