MICHEL MARTIN, HOST:
A proposal to tax California's billionaires is pitting the state's Democratic Governor Gavin Newsom against independent Senator Bernie Sanders of Vermont. Sanders was in Los Angeles Wednesday night rallying support for the measure. From member station KQED, Guy Marzorati has the story.
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BERNIE SANDERS: Thank you, LA.
GUY MARZORATI, BYLINE: Senator Sanders is backing a one-time 5% tax on billionaires' net worth that's meant to offset federal health care cuts.
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SANDERS: The billionaire class cannot have it all.
MARZORATI: The tax would apply retroactively to anyone living in the state on January 1, 2026. But it's still a long way from becoming a reality. The health care union proposing the measure needs to collect nearly 875,000 signatures to get the measure on the November ballot. But Sanders is the biggest name yet to throw his weight behind the idea.
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SANDERS: When millions of people in this state are struggling to be able to afford health care, maybe billionaires should start paying their fair share of taxes.
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MARZORATI: The billionaire tax is aimed at what Boston College Law School professor Ray Madoff calls the tax avoidance playbook of America's wealthiest residents.
RAY MADOFF: And the very first step is that they avoid salaries.
MARZORATI: By keeping their wealth in stocks and other assets, Madoff says billionaires can dodge California's progressive income tax. But Madoff has concerns about a single state like California enacting its own wealth tax.
MADOFF: Because there's too much free movement of people. It's too easy for people to pick up and move to different states or to choose to open new businesses in other states.
MARZORATI: That concern was echoed last month by California's Democratic Governor Gavin Newsom, who pointed to some billionaires already leaving the state.
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GAVIN NEWSOM: It's a badly drafted effort. It's already had an outsized impact on this state.
MARZORATI: Newsom also criticized the measure for setting aside 90% of revenue for just one area - health care.
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NEWSOM: It doesn't support our first responders and firefighters. It doesn't support the general fund and parks.
MARZORATI: Newsom is likely to play a leading role in the campaign against the billionaire tax, and some of the state's billionaires are already putting up money to fund the opposition.
For NPR News, I'm Guy Marzorati in San Jose. Transcript provided by NPR, Copyright NPR.
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