Well-paid tech workers pay tax on unrealized gains. Billionaires can too

Brian Braunlich argues that California’s Proposition 40, a proposed 5% tax on billionaires’ wealth, is workable and fair. He draws on his experience after his employer went public in 2021: exercising company shares triggered federal and California Alternative Minimum Tax on gains he had not realized by selling, leaving him with a tax bill larger than his income that year. He says this tax already affects many startup employees and founders whose shares are illiquid, undermining claims that taxing unrealized wealth necessarily drives investment away. Billionaires, he argues, have far greater means to pay: they can borrow against assets at favorable rates, while investment returns may offset the tax. He also cites the legislative analyst’s estimate that departures would reduce state revenue by less than $1 billion annually.

Braunlich frames the measure as a response to urgent healthcare funding needs: without it, more than two million Californians could lose insurance, provider payments could fall, and rural hospitals could face greater risk of closure. He says avoiding the tax could require as much as $30 billion in cuts to schools, housing, and other services, and that opponents have not offered an alternative. He acknowledges that a federal wealth tax might be better designed, that healthcare earmarking limits Prop 40’s reach, and that loopholes such as “buy, borrow, die” should be closed. But those reforms are not the immediate choice, he argues. He contrasts Sergey Brin’s campaign against the measure with Jensen Huang’s acceptance of a potential $10 billion bill, presenting the latter as an example of wealthy residents paying their share.