Even if the billionaire tax fails, California faces looming tech revolt

Proposition 40 — the “billionaire tax” — is struggling in the polls.Whether it passes or not, the real question is why it ever came up and gained considerable support. The reason is clear: California’s neo-feudal system is not working for most residents, even as tech oligarchs achieve unprecedented wealth. Call this the first sign of an incipient peasant revolt.

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By clicking above you agree to the Terms of Use and Privacy Policy.Never miss a story For much of the past quarter-century, California’s economy has been sustained by tech stocks.

These kept the state’s GDP growing and tax revenues flowing, even as other sectors like manufacturing, energy and construction declined, with many firms leaving the state.Now the tech-driven sugar high seems destined to end, amid growing concerns about the insane valuations of AI companies.It’s becoming clear to a growing array of skeptics AI may not generate the income to offset their huge expenses. That could prove disastrous for California, which relies on “crazy money” — notably, capital gains tax revenues — to pay off the core political constituencies: government workers, Sacramento-funded nonprofits and the welfare class.Over the past six years, tech money allowed Gavin Newsom to boost the state budget by two-fifths, in nominal terms.Fraud, waste and simple incompetence were all tolerated in Sacramento as long as the top 1% of taxpayers continued to generate roughly 40% of the state’s personal income tax revenue. All of this spending, sadly, has not made life better for most Californians.

Instead, the California system produces not progressive utopia, but something remarkably feudal. As the state’s ranks of billionaires have soared by 76 since 2022, far more than Florida, New York or Texas, the state also suffers the nation’s highest cos...