California’s wealth tax doesn’t fix the real problem: Cash-poor billionaires who borrow money, tax-free, to live on

Main Idea: California’s proposed billionaire wealth tax targets net worth, but critics say it would not solve the deeper problem of cash-poor billionaires like Elon Musk and Palmer Luckey who live on tax-free loans backed by their assets.

Key Points:

• Governor Gavin Newsom and other critics warn the measure could push more wealthy residents out of California instead of raising lasting revenue.
• The plan would impose a one-time 5% tax on Californians worth at least $1 billion, with payment spread over several years if needed.
• The article argues that many billionaires avoid taxable income by borrowing against stock or other assets, since loan money is not counted as income.
• Experts say a better fix would tax wealth more like income or change the rules so borrowing against assets is treated as taxable income.