California Is Chasing Wealth That Has Feet

California recently certified a 5 percent one‑time levy on billionaires, paid over five years, to raise roughly $20 billion a year for healthcare, food aid, and schools. That plan is likely to fall short because very wealthy people can and do change tax residency: several high‑net‑worth Californians moved out before the ballot cutoff and others are poised to litigate retroactive reach. The measure’s revenue model assumes about a $2 trillion taxable base, but flight and modeling errors cut that base substantially; to still hit $20 billion the implied effective rates would need to rise sharply, creating a feedback loop that pushes more wealth out of state. Los Angeles County alone contains more land value than the entire billionaire base the tax targets, and the underlying land pool cannot relocate.

A bottom‑up valuation by the Center for Land Economics estimates California land at about $8.14 trillion (cross‑checked with federal and sales data). A modest land value tax of roughly 0.25 percent would raise the same $20 billion annually, and a 1 percent rate could cover the state’s $87 billion health and human services budget indefinitely. Because land can’t flee and captures public‑created value (like transit/amenities), taxing land rather than mobile wealth would hit concentrated coastal and downtown parcels while sparing working‑class homeowners. Longstanding distortions from Proposition 13 have left assessed property values at roughly 44-60 percent of market, shifting revenue burdens onto volatile income taxes and prompting searches for exotic, escape‑prone levies instead of fixing the immovable tax base underfoot.