Financial policy | Revolt against the super rich

Marc Zuckerberg's good connection to Washington will be of no use in this case. Photo: AFP/Kent Nishimura Mark Zuckerberg is threatening to move out of California and sell his Palo Alto estate. The founder of Meta Platforms Inc. (Facebook, Instagram, WhatsApp) fears the impending billionaire tax. According to the Bloomberg Billionaires Index, Zuckerberg is the sixth richest person in the world with a fortune of $219 billion.

Parallel to the US congressional elections, voters in the most populous state of California can make another important decision: They are voting on “Proposition 40” – a referendum that aims to force billionaires to pay a one-time five percent levy on their assets.

The initiative was launched last year by the health workers' union SEIU-UHW. The initiators are calculating revenue of $100 billion. After US President Donald Trump decided on social cuts, the money could close financial gaps in the public health system Medicaid, it is said.

Around 250 billionaires currently live in the “Sunny State”. Despite having the second highest poverty rate in the United States, the outcome of the vote is considered uncertain. According to media reports, several surveys produced different results.

California's billionaires are fighting the tax with a lot of money. Google co-founder Sergey Brin is said to have spent millions of dollars on it. Other rich people are threatening to leave, which would permanently reduce the tax base. Finally, the income tax in California is considered to be particularly “progressive” by US standards; The highest income percent pays a relatively high amount of taxes here.

At the same time, many non-millionaires suffer from the extremely high prices. In general, the cost of living is estimated to be around 50 percent higher than the national average. The reasons: Many wealthy people move here because of the mild climate - there is a chronic shortage of living space - and salaries are high because of the many tech companies in Silicon Valley.

Around 250 billionaires currently live in the “Sunny State”.

The left-wing Senator Bernie Sanders also explains the stubborn resistance of some billionaires with their concern that a success in California could lead to a tax on the super-rich throughout the country.

The French economist Gabriel Zucman, who supports the campaign for the billionaire tax and is considered a pioneer of such measures at the international level, points out the growing inequality: In 2026, the real wealth of California billionaires will be 25 times as high as in 1982 - over the same period, average family income has only doubled. This emerges from the 63-page study “California Billionaires: Wealth, taxes, and wealth tax revenue estimates,” which Zucman published together with Emmanuel Saez from the University of California at Berkeley.

In the years 2023 to 2025 alone, the wealth of California billionaires increased by 144 percent. It was driven by the artificial intelligence (AI) boom that Big Tech bosses such as Elon Musk, Jeff Bezos and Mark Zuckerberg are driving. The enthusiasm for AI has driven the stock market prices of Alphabet A (Google), Microsoft and Meta Platforms, for example, well beyond the trillion euro mark.

Meanwhile, Mark Zuckerberg has wrested a deal from Meta's management that will make it easier for him to stay in California: the creation of a new class of shares without voting rights. These are intended to ensure that Zuckerberg retains his existing 60 percent voting share, even if he has to sell shares to pay the additional tax. In his case it would be 10 to 12 billion dollars. In return, Zuckerberg agrees to continue living in California for at least the next eight years. However, the new “C shares” would dilute the value of the standard shares. Apparently shareholders now want to sue Zuckerberg. 

In California, a billionaire tax is being voted on for the first time in the world. But resentment over the widening gap between normal working incomes and the stock market-driven fortunes of the mega-rich is present in many countries. Governments in Europe are also reacting to the new social imbalance, partly out of political convictions and partly with a view to the tight state coffers. The right-wing Italian government of Prime Minister Giorgia Meloni is planning to increase corporate tax for banks from 27.5 to 30.5 percent and for insurance companies from 24.1 to 27 percent. 

In Great Britain, the social democratic Labor government of the new Prime Minister Andy Burnham wants to increase the surcharge on bank profits. So far, they have paid a surcharge of three percentage points on top of the regular corporate tax, which also applies to other industries. The surcharge should now be doubled to six percent. In addition, landlords and investors have to pay two percentage points higher taxes on their income.

The Brazilian G20 presidency suggested an annual tax of two percent for billionaires for the countries of the industrialized and emerging group - this proposal was also developed by the economist Gabriel Zucman.

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