Can A Wealth Tax Balance the Budget? Do We Have Enough Billionaires to Fund Our Spending Spree?

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Almost-billionaires Adam and Jeff discuss the recent proposal in California to implement a "one-time" 5% tax on the net worth of all persons with assets in excess of $1 billion. Despite the repeated failures of such taxes in other parts of the world, California seems determined to press ahead with this ballot initiative. Adam believes many billionaires will choose to move to a state other than California in order to evade this tax if it should become law. Jeff points out that most billionaires do not necessarily have the cash or liquid assets to pay a significant tax because much of their value is tied up in their own companies and other illiquid assets. He also points out that other politicians seeking to tax "unrealized gains" on stock holdings are strangely quiet about the idea of issuing refund checks on "unrealized losses." Adam notes that New York's current $12 billion budget deficit could be fixed right away if only each of its 120 or so billionaires would write a check for about $100 million. Adam and Jeff believe that there are far too few billionaires to make a dint in the revenue shortfalls on either the state or the national level and that people will actually have to start living within their means--which is not a very popular solution. However, Adam and Jeff urge that the threshold for any wealth tax be just above the combined amounts of their individual portfolios of assets in order to be "fair."