Meet the California multimillionaires demanding the billionaire tax become law

California's Proposition 63, on the November ballot, would impose a 13 percent state income tax on residents earning over $5 million annually—targeting roughly 183,000 taxpayers statewide. The measure has already drawn $20 million in opposing spending from wealthy individuals and corporations, making it the most expensive tax fight in state history. But a coalition of California multimillionaires, including Netflix co-founder Reed Hastings and venture capitalist Chris Sacca, released a public letter this week arguing their peers have a moral and fiscal duty to support it. These aren't marginal voices: Hastings alone is worth $6 billion. The campaign has become a proxy battle over whether the superrich should voluntarily accept higher taxation for public services, or whether California's budget crisis requires mandatory redistribution.

The immediate stakes are California's ability to fund schools, healthcare, and infrastructure without deep cuts. The state faces a $68 billion budget deficit over the next decade according to the Legislative Analyst's Office. Prop 63 would theoretically raise $5-8 billion annually if it passes constitutional muster—a critical gap-filler for services already strained by population decline and business exodus. But the measure is legally vulnerable. California's top tax rate already sits at 13.3 percent, and courts have repeatedly questioned whether stacking a state wealth tax on income triggers federal constitutional protections against double taxation and unequal treatment. Even if it passes, implementation would face years of litigation.

The conservative argument is straightforward: California is already the nation's highest-tax state, and this proves it. Residents earning $250,000 already pay 9.3 percent state income tax; $500,000 earners pay 11.3 percent. Add a 13 percent wealth tax and you're looking at effective rates exceeding 50 percent when combined with federal taxes. Critics note that high earners have already left California in large numbers—Tesla moved to Texas, Oracle to Texas, now JPMorgan is scaling back San Francisco operations. A wealth tax won't reverse migration; it accelerates it. And the wealthy signatories on that open letter? They're largely compensated in options and equity, not salary. They can structure around a wealth tax. Working professionals and established business owners cannot. The proposal is punitive theater that sacrifices actual middle-class stability for the appearance of soaking billionaires.

Economically, California has precedent for what happens when it chases high earners. After the 2012 millionaires' tax increase (Prop 30), tax revenue from top earners spiked initially, then declined as the wealthy relocated or adjusted income recognition. Internal Revenue Service data shows California's share of top 1 percent earners fell from 8.3 percent nationally to 7.2 percent between 2013 and 2021. A wealth tax, which requires annual asset valuations on illiquid holdings like private companies and real estate partnerships, introduces additional complexity and enforcement costs that critics say could consume 20-30 percent of revenue just in administration.

Watch for the California Supreme Court decision expected by early 2025 on whether to allow the measure on the ballot at all. A coalition of anti-tax groups has challenged its constitutionality pre-election. The measure itself votes November 5. If it passes, expect immediate federal court challenges on the grounds that a wealth tax violates the Sixteenth Amendment's income tax limitation and the Interstate Commerce Clause. The actual enforcement battle, should Prop 63 survive both state and federal review, would begin in 2026—meaning wealthy Californians would have 12-18 months of advance notice to relocate assets and residency before the first tax bill arrives.