It's Thursday, January 29, 2026. I'm Albert Smoller, and this is The Briefing, a daily analysis of news and events from a Christian worldview. Well as we're thinking about matters economic, matters moral, worldview issues, you know, inevitably you feel it coming, we've got to talk about taxes. And taxes are a big issue right now, particularly in California, and the reason for that is that an organization, indeed it is a labor union known as the Service Employees International Union, and also identified with United Healthcare Workers West. It according to the press largely represents employees at private hospitals and also cooks and janitors. The New York Times has quote within California, the union is known for its aggressive use of the ballot initiative process to pressure healthcare companies. Okay, so the bottom line is this. California has a massive welfare state. It's a massive welfare state that has an enormous tax base. California, taken alone, would rank as one of the biggest economies in the world. But one of the issues of economic reality is that every economy has limits. And the ability to get taxes out of an economy, out of taxpayers in particular, that also has limits. And this particular labor union has been testing those limits before. They've come up with three previous initiatives that have failed, but they're going in big time on this one and it's getting a lot of attention. Here's the deal. They say they want to propose a massive tax on billionaires. And they say there are approximately 200 billionaires in California who would be covered. And it is not only an income tax, it's a wealth tax. And this labor union says that if the state of California does this just one time, it will basically bail out an awful lot of the healthcare systems and help to fund healthcare in the state of California. So who would be against that? Well, hold on. For one thing, the liberal democratic governor of California is against that because he has at least some touch with reality. That tends to come more naturally to governors of either strike than to say labor union officials. In particular, labor unions like this one. This one keeps saying the way to pay for everything and they have demanded many things in the past, including the $25 per hour minimum wage that was adopted just a matter of several years ago for healthcare workers and for others. And it has spread beyond that. But we're looking at a classic collision here between financial promise of the structure of the welfare state, the tax base and reality. This is a massive confrontation and it raises some really, really interesting questions for Christians to consider. First of all, what about taxes? Well, what are the things we know as we know the history of civilization? And of course, there are many things in the early epochs of civilization we don't know. But we are particularly well aware of many of the empires and societies and kingdoms of the ancient world. And most famously, Israel. And also when we're looking at the Roman Empire, we're looking at even other more ancient empires, taxation is just something that they got to pretty quickly. And the reason for that is pretty clear. You have people who have money or property and power. And if you're going to have an empire, if you're going to have a monarchy, if you're going to have a, a, a policy political system, you're going to have to pay for that somehow and some form of taxation has become more the rule than the exception. And of course, there are all kinds of experiments with this throughout human history. When the United States of America became a nation, it did not have a national income tax. And it wasn't even clear that in an ongoing manner, the federal government had the right to tax citizens directly. The states were taxing citizens already. But it really wasn't until the 16th Amendment in 1913. So you're going to fast forward from say the 1780s all the way to the 19 teens until the United States adopted through constitutional amendment, well, so it was the 16th Amendment allowing the federal government to tax its citizens in terms of an income tax. So by the way, I should stipulate there were other taxes. There were import taxes, excise taxes, border taxes, all kinds of things like that. That's very different than an income tax, the direct taxation of citizens to support the federal government. That really wasn't possible until the vast expansion of the federal government. And by the way, rather elastic constitutional interpretation. But that goes back to the fact that there actually was, however, a constitutional amendment that was adopted. But those who adopted the amendment made all kinds of assurances that what did happen wouldn't happen. Okay, so that's pretty predictable when it comes to taxation. All right, so this is an initiative targeted at California. And as of yet, it doesn't have the required number of signatures on petitions necessary to trigger the ballot vote in November. But it is expected by both sides that it probably will get that. For one thing, this kind of ballot measure in California has become big business. There are businesses that arrange and orchestrate the process of getting the signatures. And they then have to be validated, authenticated, certified. And then the matter is presented to the voters of California. Now, California adopted an income tax itself in 1935. So that's more recent than most people might imagine. But the state of California, of course, was at that time experiencing a vast explosion. It's had several explosions in population since then. But going back to the 1930s, California was really in many ways a young state in terms just of developing some of the costs and some of the revenue basis that would be necessary for the state as we know it today. And so that was rather interesting. 1935 California adopts what became a graduated income tax. And graduated, by the way, let's just say it now. We'll come back to it. Means that the more income you have, the rate of taxation also goes up. And usually by brackets. Okay, so this whole that thought for a moment because it turns out to be really, really crucial as we consider this. In 2012, California voters adopted Proposition 3, which was an increase on the marginal tax rate that would raise for high earners that tax rate up to 3% of taxable income. And that was presented as a temporary measure again, 2012. And an emergency, a temporary measure, Proposition 3 was adopted, raising the qualified income tax up to a potential of 3%. Now, when you look at stake taxes, that's pretty high, especially the way California defines them. But guess what? It was presented as a temporary measure. Don't ever believe a government that tells you a tax increase is temporary. Because what happens is that the economy adjusts to that level. And it's virtually impossible to go back. That's why even though what was voted for in 2012 as a temporary measure, it turned out not to be temporary. It has been extended by Proposition 55 at least until 2030. But don't believe for a moment that it's going to be rescinded in 2030. Know if anything, there's going to be an increase beyond that. Okay, so now you're looking at California and this effort undertaken by this labor union in the healthcare sector in particular to try to get Californians to adopt a tax, a direct tax, a wealth tax on billionaires. Now, you know, some people would hear that and say, well, that makes a lot of sense. Billionaires, after all, have the money that can pay more in taxes. Is that going to afford to pay them? And so let's just look at this wealth tax on billionaires. But here's where things get really, really interesting. If you're going to have a tax and it's going to be most effective, then you have to have a tax that gets you the money you need, the revenue you need as a government. But doesn't create an incentive for people actually to leave your state. That's the problem for the 50 states. Every one of them can adopt its own income tax or lack of an income tax. The shape of an income tax if it does have an income tax. And yet in this case, we're not talking about an income tax. So listen carefully, this isn't in this proposal and income tax. It is a wealth tax. And that means a percentage of total wealth. And that's 5%. So 5% of total wealth on these billionaires and those who are proposing this, again, this union says they're about 200 of them in California. Let me just get to the quick. If this passes, there will be a lot fewer in California. But nonetheless, just understand the problems here are massive. So number one, when we say it's not an income tax, it's a wealth tax. Well, what's the difference? Well, an income tax is a percentage tax usually by relative bracket on what is considered qualified income. And then we'll talk more about that in just a moment. But that's an income tax. And that means that if you have income in a particular year, then your tax at this rate according to this bracket. What's the difference between an income tax and a wealth tax? An income tax is, well, just that. It's a tax on income. A wealth tax is, well, it says right out loud, it's a tax on wealth. Okay. So this means that if you are a billionaire, you're not being taxed on the qualified income you receive in any particular year. And that would include what are called capital gains. That means the returns on investment. And sometimes even growth on investments, depending upon the circumstance. But when you say a wealth tax, it means there's some determination of your total wealth. And you owe five percent of that. Okay. You say, well, billionaires again can afford it. Well, maybe they can and maybe they can't. And here's where we have to define the terms so that we understand just how radical and perhaps even ridiculous this proposal is. Many of the billionaires in California are billionaires on paper. And so they hold, let's just say, because of their venture capital or because of their ideas, take Silicon Valley because they have an idea. They have a lot of venture capital behind the idea. And soon they have a corporation and that corporation is worth, let's just say, $5 billion. And they have a 40% stake in it. So they've got $2 billion on paper. But that doesn't mean they have $2 billion in the bank. And as a matter of fact, a good many of these billionaires would be bankrupt if they had to pay this tax. Furthermore, it would create massive, massive, incalculable, disequilibrium in the entire economy, say, of the digital world of Silicon Valley. Because a lot of these companies have a wealth or at least a worth and a stock value based on assumptions made by people who are investing in the stock market. And frankly, if there has to be some determination of exactly what that is worth right now, you might see a deflation in the entire economy. And furthermore, you have created an incentive for a lot of people just to stay away from this entire picture. Let's just say right now, if you just look at the growth in the US stock market over the course of the last 24 months, you take Silicon Valley out of that and I'm not going to argue whether it's good or bad, but you take Silicon Valley out of that and the stock market let's just say is facing catastrophe. This is concerning even a lot of liberals. There are a lot of liberals who want more money, more money, ever more money for the big state and for the welfare state. They recognize that if the money leaves, you can't tax anything. And so even the editorial board of the Washington Post has made a very interesting observation and that this one to get your attention. The editorial writers are actually using a language. I think just about everyone can understand. Listen to this quote, many progressives think of taxation the way teenage boys think about Cologne. If some is good, more must be great. That's an amazing statement, an amazing insight. Progressives think of taxation the way teenage boys think about Cologne. If some is good, more must be great. The editorial board of the Washington Post, again, not a conservative board went on to say, quote, California already wreaks of over taxation. But it's thinking about trying out its most potent scent yet, a wealth tax. Just a whiff has some of the state's wealthiest residents fleeing. So that's exactly what's happening. Even the rumor, the threat of such a wealth tax. Well, here's another important point in world view analysis. Money is a very real thing. Now that's not to say that every claim about money is real. But you are talking about, you're talking about value and you're talking about wealth. You have to recognize that in this world, but also in much of the ancient world, people could flee the taxation. And money is movable. This is one of the things. billionaires don't have to live in California. They can live in Texas. They can live in, well, Florida calls itself the free state of Florida. It doesn't have an income tax. When you come into the state, welcome to the free state of Florida. When you leave the state, thanks for visiting the free state of Florida, Florida does not have an income tax. And thus, there are an awful lot of billionaires who are not moving from Florida. They're moving to Florida. Florida assumes that it's going to get an awful lot of economic advantage out of that economic activity moving to Florida. And all those billionaires investing in Florida. And so at least the monetary and economic and financial assumptions of the state of Florida is having more people with wealth here means they're going to spend it. And that's good for the economy. And that's good for Florida. There's more to it than that, but there's not less to it than that. The state of California, as the Washington Post observes, already reeks of over taxation. It's problem already, as I mentioned, going back to proposition 30 and then proposition 55, a fascinating stuff. This myth that you can have a temporary progressive increase in taxation rate, that just doesn't turn out to be true. Because government conforms to that level. And by the way, you're seeing that right now in the controversy over the end of the so-called Obamacare subsidies that timed out at the end of the year, big partisan fight. But remember that President Biden put those subsidies for Obamacare in as a temporary measure because of COVID. But the economy adjusts to that so-called temporary measure. And so the Democrats are saying that what the Republicans are for is cutting, spending, and support for health care. That is not at all the case. But you know what? In terms of how the economy has adjusted, the Democrats knew full well that when they put in this temporary measure, it wouldn't be temporary. All right. So let's go back to the problem with a wealth tax. Let's say you have an idea. You have an idea and it turns into a massive software program or that's almost becoming out of date. It turns into a massive artificial intelligence proposal. Let's just say people start investing in that. You own the idea, or at least you own a considerable percentage of the idea. And you who had nothing at age 30, you're now worth again several billion dollars at age 35. But once again, we have to recognize, just think about some of the famous names where these tech giants have failed, that's mostly on paper. Now smart young tech billionaires start diversifying their wealth and their income. They start putting in some hedges and that's one of the reasons why some of the folks in Silicon Valley are amazingly invested in quite non-silicon valley sectors of the economy. But that honestly is just smart. And also you have the reality that you could have this brilliant idea and it could be worth all this money. And then the next thing, just think of some of the AI platforms right now. This one looked like the absolute coming thing until this one just all this and came along and then that one is immediately devalued. Who wants to be a billionaire in a state like that? The gets taxed where you have to come up with money you don't actually have to pay for wealth that might not be real. And then you have the tax which is supposed to be one time and you're an idiot if you think it's going to happen one time. And you just go down the list pretty soon the golden goose is dead. And that's exactly what the Washington Post editor said. Quote, California's billionaire tax ballot proposal is killing golden geese. Okay, so let's get tangible about this. What does that look like? Well, it looks like a billionaires like Peter Tiel basically moving their operations out of California. Egon Musk, by the way, had begun doing that even before. And it's because of the progressivist leftist ideologies in California, it is becoming an unsafe place for this kind of investment. And what makes that so amazing is that it was California and the culture often just spoken of in shorthand is Silicon Valley that produced so much of this momentum, so many of these technologies. And yet some of these folks are recognizing that they got to get out of California quick. Okay, here's something you probably don't know. If you look at California's graduated income tax in 2026. So this take the last completed years. Let's just look at say 2324 and and pretty soon we'll have all the data from 25. Here's the thing. California's income tax as it is is already so graduated that the top 1% of earners in California pay 50% of the entire revenue. You get that 50% of the entire tax revenue coming to California through the income tax comes from the top 1% of earners. That's why California realizes and that's why Gavin Newsom who's a liberal Democrat, the governor of California, he recognizes that if this ballot measure passes not only are there going to be endless constitutional challenges, not to mention all kinds of questions. No one has a clue of how to answer as to how this works. But furthermore, it can become an absolute death signal for the entire state of California. Not only will people who are there now try to move, but people who might move there are likely to stay far, far away. And by the way, the states that stand to benefit from this or states like just as an example, you could just say Texas of Lord, just give two examples because you have people moving there and both of those states are basically saying California billionaires come get a big ranch in Texas or a big oceanfront home in Florida do business because these two states want billionaires doing business. Okay, now again in worldview terms, this kid's even more interesting than you might think, how do you leave California? Well, California doesn't make it easy to leave. And as a matter of fact, the law concerning taxation in California means you have to prove not that you are there, but that you're not there, that you're not subject to this jurisdiction. And you know what? As the Wall Street Journal says, quote, California has few hard and fast rules on residency. Tax advisors say you're generally considered a resident if California is your domicile, a true home base to which you plan to return. A person domiciled in California who spends time elsewhere is sometimes still expected to pay state income taxes. End quote, the key words there are if you plan to return because the legal presumption of the tax collectors in California backed up with lots of state law is that you just might plan to return. And if there's any chance you might plan to return, you're subject to current California state income taxes. We got you one way or another. That's why some of these billionaires and even people who are billionaires, but might hope to be billionaires or even just millionaires, they're getting out of California and they're sending the signal very, very clearly. The Wall Street Journal says citing one authority, the man's sideators, Stephen Toxker, managing principal of a major law firm in Beverly Hills, he said, quote, if you leave, you really have to leave. He goes on and says that he advises clients on navigating state residency. So this means such things as keeping your Christmas card free from California, making certain that your business affairs are not located much in California, if at all. You can't be a member of the LA Country Club and claim that you're not a resident of California. And so the things get really, really interesting, but basically the state wins. If you leave, the state wins. If you stay, that's the way the taxation logic works. Now some people have been able to beat it, but to beat it, you really have to leave. Leave as in going back to visit, but more rarely than you might even think. I hear people who say, look, you don't spend X number of days there. Well, you know, you talk to your lawyer because that lawyer may tell you that that number of days that might trigger this taxation might even change from year to year. And the state of California even claims to be able to do some of these things retroactively. So you left a state, guess what? Legally, according to the tax man in California, you might not have left the state after all. By the way, some of these statistics are very context dependent. The Wall Street Journal in one place says that in 2023, the top 0.1% of earners paid one six of its personal tax revenue. So at least according to one of these graphs, the top 1% paid 50%. And this is the top 0.1% that that's one tenth of one percent. They paid one sixth of the total income tax revenue. So again, the state of California only has to tick off a few of these and they only have to leave and go to Texas or Florida quite loudly. And this measure, if adopted, will end up costing the state of California, well, far, far beyond what our imaginations can measure right now as compared to the people staying in the state and paying income tax. Okay, now some of the predictable people are for this tax, Democratic Socialist, US Senator Bernie Sanders independent of Vermont. Well, he's all for it. He sees this as the wave of the future. And of course, it is until it just all of a sudden stops working. And not only does it not bring in more tax revenue, it produces a lot less tax revenue. By the way, when Proposition 30 was adopted in 2012, Proposition 55 extended predictably what was supposed to be temporary, the Washington Post editorial board responds by saying this quote, high earners responded by either leaving the state or reducing their taxable income. Economist Joshua Ruha and Ryan Shoe concluded in a 2024 research paper that the effect of these supposed increases was the erosion of 45.2% of state windfall tax revenues within the first year 60.9% within two years. Again, you raise the taxes like this, the people just leave and the tax base falls. Now, I said that there are huge world view issues here. There are. And certainly when it comes to taxation, you know, this was a controversial issue even during the time of Jesus. That's why Jesus was asked about paying taxes. He famously asked to look at the coin whose images and his Caesar's image render under Caesar the things that are Caesar's and under God, the things that are God's. And clearly, the biblical theology there is that Caesar can put his image on a coin, but God put his image on every single human being. And thus the value of a human being made in the image of God is immeasurably different than the value of a coin stamped with Caesar's image. Furthermore, those who handle Caesar's coins are accountable to Caesar, with those who handle human beings and how we treat human beings were answerable to God. But you know, one of the interesting things about that statement made by Jesus is that it's easy to get to the bigger biblical theology point and miss the direct point, which is Jesus basically said, Christians should pay taxes. And of course, he's speaking there to a Jewish audience. In other words, Caesar is a, he has authority to raise taxes. Now those taxes can become honest, they can become oppressive, and that's also clear. You can think of some old testament illustrations of that. And of course, throughout human history, much the same thing. And nobody loves paying taxes. And especially I can say that this is one of the most important distinctions between progressives and conservatives, liberals and conservatives in the United States. Beginning in the 20th century, when President Woodrow Wilson, a Democrat, of course, and a true liberal in the progressive sense, he came into office planning a vast expansion of the federal government. That would require a lot of money. That's directly tied to the need for an income tax. You also have to look at someone like Franklin Delano Roosevelt, President Roosevelt, the New Deal, also vast expansion of government. The federal government takes on more and more all the time, a greater percentage of the total economy. And that requires being, of course, being funded. And of course, even conservatives, at least in general, believe that there are basic functions of government that should be rightly and rightlessly funded by a proper form of taxation, an equitable form of taxation. And this includes national defense, national security, it includes police law and order. You just go down the list and certain programs that even conservatives would agree are quite necessary. But you have to understand that even the most minimalist conservative has to require some money coming into the federal government. And of course, the most well-died progressive, once just about all of it, which is what puts the socialism in socialism. But Christians need to have an historical view that reminds us that excess taxation basically can bring down an entire economy and an entire civilization. It's easy to see how it might do just that in California, which is why Governor Gavin Newsom is working so hard to kill this thing before it can happen. Christians understand there are huge worldview issues attached to this and we'll have more time to discuss those in days and weeks to come. Meanwhile, keep an eye on California because of the very least, things are about to get interesting. Thanks for listening to the briefing. For more information, go to my website at AlbertMohor.com. You can follow me on exertwitter by going to x.com, forward slash AlbertMohor for information on the Southern Baptist Theological Seminary, go to spts.edu for information on voice college, just go to voicecolleys.com. I'll meet you again tomorrow for the briefing.
