‘Trojan horse’: California’s top 1% pay nearly half the state’s income taxes. Prop 40 opponents warn the billionaire tax could reach everyone else

California’s revenue is notoriously top heavy, leaving state coffers vulnerable to boom-and-bust cycles as the wealthiest residents see their incomes rise and fall with the stock market.

In recent years, the top 1% of California households have accounted for about 40%-50% of all personal income tax revenue, according to the conservative Hoover Institution.

In fact, the top 1% paid more than $60 billion in California personal income taxes in 2021, when the stock market soared. The flip side is that the state suffers crippling deficits when the market tanks, like during the Great Financial Crisis.

Now, California’s Proposition 40 seeks to tax billionaires’ wealth in addition to their incomes, and opponents have launched a full-court press, calling it a “Trojan horse” that will eventually come for all Californians.

The ballot initiative calls for residents worth more than $1 billion to pay a one-time tax equivalent to 5% of their assets. The union pushing Prop 40, the Service Employees International Union-United Healthcare Workers West, has said the wealth tax could raise $100 billion in revenue and help offset federal cuts to health spending.

Prop 40 includes a provision that says the state legislature could........

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