California’s latest push to tax extreme wealth has collided head‑on with a familiar Bay Area anxiety: what happens if the people who fund so much of the region’s economy simply leave. As state leaders float a new levy on billionaires, San Jose Mayor Matt Mahan has emerged as one of the most prominent local voices warning that the policy could backfire, arguing that it is possible to chase away prosperity in the name of fairness.
His message, distilled in a pointed social media post telling Sacramento not to “hurt yourself to win,” captures a broader tension in California politics. I see it as a test of whether the state can balance its appetite for redistribution with the hard math of tax flight, investment decisions, and the fragile ecosystem that keeps the Bay Area’s innovation engine running.
The billionaire tax proposal and what is at stake
At the center of the fight is a proposed initiative that would add a new layer of taxes on the state’s richest residents, targeting billionaires whose fortunes are often tied up in stock, private companies, and other assets rather than traditional income. The measure is designed to reach wealth that typically escapes standard income taxes, and it would give affected taxpayers the option to spread payments over five years, a structure meant to soften the immediate hit while still capturing a share of their gains. Supporters frame the idea as a way to tap extraordinary fortunes at the very top of the economy and channel that money into public services that have struggled to keep pace with California’s cost of living.
Even with that five‑year payment window, the proposal carries a built‑in complication that its authors acknowledge: the tax would continue to apply for a period of time if wealthy residents relocate out of California. The initiative’s backers see this as a guardrail against a quick exodus, but critics argue that it could instead harden the resolve of billionaires to move sooner rather than later, especially if they believe the state is signaling a long‑term appetite for taxing wealth, not just income. The text of the measure makes clear that if voters approve it, billionaires could choose to pay over several years, yet they would still face obligations tied to their California wealth even if they change their primary residence, a feature described in detail in the section explaining how payments could be spread across five years for an additional period of tax liability after relocation.
Matt Mahan’s warning from San Jose
Into this debate stepped San Jose Mayor Matt Mahan, who has tried to position himself as both a pragmatic Democrat and a guardian of the Bay Area’s economic base. In a post on X, Mahan argued that “Driving billionaires out of state might feel” satisfying to some voters but would ultimately undermine the region’s ability to fund schools, transit, and social programs, a sentiment that reflects his broader message that California cannot afford to treat its most mobile taxpayers as expendable. By invoking the idea that you should not “hurt yourself to win,” he is effectively telling fellow Democrats that symbolic victories over the ultra‑rich are meaningless if they erode the tax base that underwrites progressive ambitions…