The Wall Street Journal has a history of loving tax cuts, but in a new report, they're warning that President Donald Trump's billionaire tax cuts are hurting the U.S. economy.
As recently as Dec. 31, the Journal was singing the praises of the nine states in which people would pay less in taxes. A little over a month later, Carol Ryan wrote that when billionaires don't pay their taxes, "look at who picks up the tab."
"Wealth concentration is affecting the wider economy," the report said, and it "shows why the issue isn’t going away."
California is proposing a wealth tax, which WSJ is concerned about, but only because for many rich households, their money is tied to the stock market.
"This could mean the entire economy pays a steep price in the next market correction," the report said.
"California has the highest concentration of billionaires in the U.S. with 255 individuals, or slightly more than a fifth of the country’s billionaire population," the report said, citing the wealth-intelligence firm Altrata.
A proposal for a ballot measure in November would levy an amount "calculated based on whichever is the higher of a billionaire’s voting interest or economic interest in a company." It would be a one-time levy on the wealth of any California resident worth over $1 billion. The solution is an idea to fix the Medicaid shortfall left by the GOP's significant cuts to the program in the "One Big Beautiful Bill" measure passed last year.
The right-wing Tax Foundation claims it will hurt tech leaders.
The ultrarich could simply leave California if they're unhappy, which is what Elon Musk did when he moved SpaceX and Tesla to Texas. However, Musk claims he did it because he was angry over gender identity laws. The ballot measure must still collect signatures before it can be up for a vote.
The Journal noted that Google co-founder Sergey Brin left California for Florida and Lake Tahoe, Nevada. He also moved several LLCs to Nevada.
Far-right Palantir co-founder Peter Thiel suggested he might do the same.
The Journal claims that such threats from billionaires might be enough to convince California voters not to tax the ultrawealthy.
The Investment Migration Council wrote on its website that "tax avoidance is the main reason actor Yul Brynner, entrepreneur Eduardo Saverin and inventor Earl Tupper abandoned U.S. citizenship."
One of the biggest arguments Democrats made in 2022 was for adding more workers to the Internal Revenue Service (IRS) to focus on tax evasion by the wealthiest Americans, which costs the U.S. approximately $150 billion each year, CNBC reported.
The Journal expects that billionaire tax evasion will likely become a more significant issue as the U.S. economy continues to slump and the wealth gap grows.
Since 1990, the WSJ has reported that the top 0.1 percent of wage earners now hold a much larger share of U.S. wealth. In the past 26 years, it has grown 14.4 percent for them.
"Meanwhile, the bottom half of American households have lost ground. Their 2.5 percent cut of the country’s wealth has slipped from 3.5 percent in 1990," the report said.
