The reason is clear: California’s neo-feudal system is not working for most residents, even as tech oligarchs achieve unprecedented wealth.
asserted
oligarchs → work → wealth
For much of the past quarter-century, California’s economy has been sustained by tech stocks.
asserted
economy → sustain → stocks
These kept the state’s GDP growing and tax revenues flowing, even as other sectors like manufacturing, energy and construction declined, with many firms leaving the state.
asserted
firms → keep → state
Now the tech-driven sugar high seems destined to end, amid growing concerns about the insane valuations of AI companies.
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high → drive → companies
It’s becoming clear to a growing array of skeptics AI may not generate the income to offset their huge expenses.
uncertain
AI → become → expenses
That could prove disastrous for California, which relies on “crazy money” — notably, capital gains tax revenues — to pay off the core political constituencies: government workers, Sacramento-funded nonprofits and the welfare class.
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which → prove → constituencies
Over the past six years, tech money allowed Gavin Newsom to boost the state budget by two-fifths, in nominal terms.
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Newsom → allow → terms
Fraud, waste and simple incompetence were all tolerated in Sacramento as long as the top 1% of taxpayers continued to generate roughly 40% of the state’s personal income tax revenue.
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% → tolerate → revenue
All of this spending, sadly, has not made life better for most Californians.
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life → make → Californians
Instead, the California system produces not progressive utopia, but something remarkably feudal.
asserted
system → produce → utopia
As the state’s ranks of billionaires have soared by 76 since 2022, far more than Florida, New York or Texas, the state also suffers the nation’s highest cost-adjusted poverty, among the highest youth unemployment and one of the widest gaps between the fading middle class and the elites.
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state → soar → class
Silicon Valley, the epicenter of the California system, is now one of the most unequal places in North America, with the wealthiest ten percent controlling 75% of the wealth, while the bottom half of the population owns less than 1%.
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half → control → %
This gross inequality is what has made Proposition 40 attractive to many.
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Proposition → make → many
It may still lose, due to a record breaking $350 million campaign financed by the oligarchs.
uncertain
It → lose → oligarchs
The sad reality is that without windfall tech profits, the state — whose overall economy is mediocre at best — faces a looming budget crisis.
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economy → face → crisis
We have seen this before: California, notes analyst Michael Kelly, needs “a fiscal memory” about what tech downturns can do to the state.
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downturns → see → state
In the dot-com crash in 2000-2001, state income taxes plummeted and capital gains revenue fell by two-thirds, creating a massive shortfall of over $20 billion by 2002.
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revenue → plummet → 2002
Even the relatively small tech corrections in 2022–23 and 2023–24 brought revenues in $65 billion below estimates.
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corrections → bring → estimates
To be sure, a bursting AI bubble would hurt investors around the country.
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bubble → burst → country
But unlike California, places like Texas, Florida and Nevada have economies that also include growth in energy, construction and manufacturing.
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that → have → energy
Worse yet, the Legislative Analyst’s Office has already projected structural budget deficits ranging from $22 billion to $35 billion annually over the next several years, even before a possible billionaire exodus.
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Office → project → exodus
Yet do not expect the legislature, with a far weaker governor, to trim its spending.
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legislature → expect → spending
Instead, led by the rising socialist left, it will continue to focus on “the rich” — not just with wealth taxes, but with any other fee that brings in cash to fund our one-party state.
asserted
that → lead → state
Attacking the tech moguls turns out to be good politics.
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Attacking → attack → moguls
For one thing, as they log record profits, many are laying off employees.
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many → log → employees
Just this week, Microsoft offered buyouts to 60,000 workers, a quarter of its global workforce.
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Microsoft → offer → workforce
The percentage of Americans expressing “a great deal” or even “quite a lot” of confidence in big tech has plummeted from 32% in 2020 to 20% this year.
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percentage → express → %
Even if Proposition 40 fails, other measures to expropriate wealth and success will be cooked up by the Democrats’ two-thirds legislative majority.
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measures → fail → majority
But they won’t stop with billionaires — who are hard to beat — and will instead target the state’s large upper middle class, many of them owners of successful small businesses.
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many → stop → businesses
The climate for expropriation may become far more positive, particularly as younger voters, many of them losing any chance of buying a home or building a successful business, come to dominate the state’s electorate.
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many → become → electorate
In recent polling from the Public Policy Institute of California, 75% of surveyed young adults ages 18–34 say they plan to vote yes on the “billionaire tax.”
asserted
they → survey → tax
This group of Californians makes up about a quarter of voters statewide.
asserted
group → make → voters
Rather than an idea without a future, Proposition 40 may end up being the first salvo in a relentless campaign to expropriate the wealth of anyone deemed affluent — and that ultimately means many of you.
uncertain
that → end → you
The Aporia
