On Wednesday, Investor Kevin O’Leary criticized a proposed California wealth tax, calling it “un-American” and warning it could face legal challenges while driving more businesses and wealthy residents out of the state.
O’Leary Slams California Wealth Tax Proposal
In a post on X alongside a Fox News interview clip, O’Leary wrote: “I don’t think any of this is gonna work. First of all, California is the poster child for the worst managed state in the union.”
He added that the state is “poorly managed,” has “lost businesses,” and said, “billionaires have been leaving ahead of any of this debate.”
He further argued the proposal would be legally and practically unworkable, calling it “un-American, unconstitutional, and it’s impossible to implement.”
During the interview, O’Leary criticized the proposal to tax unrealized gains, arguing it creates major valuation problems.
“There’s no liquidity in just saying this is what you’re worth this year, this is what you’re worth next year,” he said. “You’re trying to make decisions about asset values that are not cash.”
He also predicted the measure would be tied up in court. “This is going to be litigation until the cows come home,” O’Leary said.
A reporter noted the proposal could allow taxation if two-thirds of the California legislature approves it and raised concerns about state officials determining asset values.
California Wealth Tax Debate
The proposed California “Billionaire Tax” sparked criticism from major tech and finance figures, who warned it could expand beyond the ultra-wealthy and harm the state’s economy.
Earlier, Chamath Palihapitiya called it an “Everyone Tax,” arguing it could eventually apply to most Californians and be expanded without voter approval.
Nvidia Corp. (NASDAQ:NVDA) CEO Jensen Huang defended California’s high-tax environment and urged people to stay, even as wealthy residents continue relocating out of the state.
Andreessen Horowitz co-founder Ben Horowitz warned that similar wealth tax policies could damage Silicon Valley’s startup ecosystem, citing Norway’s experience with unrealized capital gains taxes and entrepreneur outflows.
The debate comes amid broader national discussions over wealth taxes, with supporters pushing for higher taxes on billionaires and critics warning of economic disruption and legal challenges.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Kathy Hutchins / Shutterstock.com
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