French economist Gabriel Zucman has come to California bearing a familiar French solution to a fiscal problem: another tax.

Once based at the University of California, Berkeley, Zucman is back and campaigning for Proposition 40, which would impose an allegedly one-time 5 percent tax on the net worth of Californians worth more than $1 billion. Zucman, who coauthored the proposition, estimates that the tax could raise about $100 billion and claims that 90 percent of the proceeds would go to health care.

The California Legislative Analyst's office is far more cautious, saying it would raise only "tens of billions" and could cause a long-term loss of income-tax revenue as wealthy people leave the state with the companies they created.

I've written plenty about why wealth taxes are economically destructive, administratively nightmarish, and unlikely to achieve anything close to what their advocates promise. But Zucman's prescription is wrong for a more fundamental reason, as his (and my) native country shows: Raising taxes to fuel ever-larger demands for government spending is a recipe for disaster.

Unless you've been living in a remote cave recently, you've likely seen all the protests and destruction in France. But do you know why it's happening?

As another economist, Paul Krugman, rightly noted back in 2017, "France offers a social safety net beyond the wildest dreams of U.S. progressives: guaranteed high-quality health care for all, generous paid leave for new parents, universal pre-K, and much more."

For decades, France has answered any perceived desire with government spending, then responded to the resulting fiscal problem by seeking new revenue sources. Today, French government spending consumes roughly 58 percent of gross domestic product (GDP).

Krugman gloated that France wasn't suffering social collapse and speculated that it was due to all the spending. He certainly can't say that anymore. In fact, he is now worried that France may be on the precipice of a debt crisis. The truth is that France hasn't done well for some time, even when Krugman cheered its spending.

One of the groups in the street today, young people, has faced widespread unemployment for a long time. The youth unemployment rate in France (ages 15-24) has hovered between 17 percent and 27 percent since 2000. In the second quarter of 2026, it was 21.6 percent, against 14.8 percent in the Eurozone and 9.9 percent in the U.S.

French people also pay some of the highest taxes in the developed world, and they're not happy with the return. The government already takes more than 52 percent of the country's output in revenue, runs deficits exceeding 5 percent of GDP, and has accumulated debt approaching 120 percent of GDP. Nonetheless, French students complain that the government is shortchanging schools, while everyone sees that it is shortchanging its army and police.

The students aren't wrong to feel left out. At The Two Cents Substack, Hoover Institution scholar Hanno Lustig calculates that, between 1995 and 2024, spending on social protection and health (most of which benefits older people) rose from 53.1 percent to 58.7 percent of all French government spending. The share devoted to education, defense, and public order fell from 15.2 percent to 13.7 percent. Transportation fell from 5.3 percent to 3.8 percent.

In other words, France has built an enormous welfare state, much of it devoted to older citizens, while letting other state capacities and basic services fall apart. As transfers of wealth swallow a larger share of the budget, everything else gets squeezed.

That is the fiscal ratchet Californians should worry about when Zucman tells them Proposition 40 is necessary to "save" health care. Proponents claim Washington "cut" Medicaid, but that language is misleading. California's deficit started long before any Washington spending reductions. Besides, federal Medicaid spending isn't falling—not even close. The Congressional Budget Office estimates it will reach $708 billion in 2026, 8 percent more than in 2025. What Washington did in the 2025 budget reconciliation law was reduce Medicaid's future growth relative to previous projections, partly by changing eligibility and enrollment rules and financing arrangements.

This is how the ratchet works. Once the government projects a spending increase, anything less becomes a cut. And once Washington fails to finance the entire projected increase, Californians are told that Sacramento must backfill the missing money. And how should it do that? Conveniently, by creating an entirely new tax.

France has run this experiment for decades. It has an incredibly generous welfare state paid for with very high taxes; it's even tried a wealth tax and has a value-added tax, yet somehow it's never enough. Its welfare state has not eliminated scarcity. It has merely transferred the job of rationing scarce resources to politicians.

Zucman looks at California and sees hundreds of billions of dollars of private wealth waiting to solve a public finance problem. Californians should look across the Atlantic and ask a different question: What happens after politicians decide that every spending adjustment can be delayed until tomorrow by finding another pot of private wealth?

France should not be sending California tax advice. It should be sending a warning.

COPYRIGHT 2026 CREATORS.COM

The post France Is a Warning to California's Tax-the-Rich Crowd appeared first on Reason Magazine.

Il numero uno di Meta Mark Zuckerberg si prepara a pagare la tassa sui miliardari, se la California approverà la misura. E il gruppo a cui fanno capo Facebook, Instagram e Whatsapp corre ai ripari per consentirgli di farlo senza mettere a rischio il controllo della società. Meta infatti, come emerge da un documento depositato alla Securities and Exchange Commission, distribuirà ai soci nuove azioni di classe C prive di diritto di voto in aggiunta a quelle già possedute. Zuckerberg potrà vendere o trasferire immediatamente il 20% dei titoli che riceverà, una quota equivalente a circa il 10% della sua partecipazione. E potrà usare il ricavato per saldare l’eventuale imposta. In cambio si impegna a mantenere la residenza in California per i prossimi otto anni.

L’intesa arriva a meno di due settimane dal referendum del 3 novembre sulla Proposition 40, che propone una patrimoniale una tantum del 5% sulle fortune dei circa 250 miliardari residenti nel Golden State e l’utilizzo del gettito per finanziare la sanità depauperata dai tagli di Trump e programmi per l’istruzione e l’assistenza alimentare. In caso di successo, segnerebbe una svolta per il dibattito sulla tassazione della ricchezza.

Secondo i documenti societari Zuckerberg, il cui patrimonio è stimato intorno ai 240 miliardi di dollari, aveva comunicato a un Comitato speciale di amministratori indipendenti di star valutando il trasferimento della residenza fuori dallo Stato per cercare di dribblare un’imposta che nel suo caso varrebbe circa 10 miliardi. Per pagare il conto avrebbe infatti dovuto vendere parte delle azioni di classe B, quelle che gli garantiscono diritti di voto maggiorati: la sua quota di controllo sarebbe scesa dal 60,6% a circa il 53%. Il Comitato speciale, ritenendo “di fondamentale importanza mantenere il Sig. Zuckerberg in una posizione di leadership all’interno della nostra azienda” e far sì che “che continui a risiedere e a gestire l’Azienda dalla nostra sede centrale in California per garantire la sua continua capacità di guidare efficacemente le nostre prestazioni durante quest’era di sfide e concorrenza senza precedenti”, ha trovato giocoforza una soluzione: una riorganizzazione della struttura azionaria. Meta distribuirà appunto ai soci dal gennaio 2027 nuove azioni di classe C, prive di diritto di voto, in aggiunta a quelle già possedute.

L’economista francese Gabriel Zucman, che da anni studia la concentrazione della ricchezza e le modalità per tassare i grandi patrimoni, ha scritto su X che la decisione è la prova che “la campagna per la Proposition 40 sta funzionando”: viene meno infatti l’argomento usato da molti oppositori secondo cui i miliardari “non potrebbero” versare il dovuto pena la perdita del controllo delle loro compagnie. Se messi alle strette, evidentemente, si può fare.

Da notare, peraltro, che come ricorda il documento inviato alla Sec dal 2013 Zuckerberg riceve uno stipendio annuo simbolico di un dollaro come amministratore delegato e presidente del gruppo. La società lo utilizza come argomento per motivare la sua necessità di liquidità. Ma il punto è che la sua ricchezza deriva soprattutto dal valore delle azioni Meta, che può crescere senza tradursi in reddito imponibile. È un meccanismo comune tra i grandi miliardari: finché le azioni non vengono vendute, l’incremento di valore resta generalmente una plusvalenza non realizzata e non è tassato come reddito da capitale. Il risultato che, a fronte della impressionante concentrazione delle fortune nelle mani di pochi, quei pochi riescono a versare meno tasse rispetto a un lavoratore del ceto medio. La patrimoniale una tantum proposta da un sindacato di lavoratori della sanità punta a correggere in parte questa asimmetria.

Come da copione l’opposizione alla misura è stata però violenta: molti grandi nomi della Silicon Valley, fallito l’obiettivo di impedire che la proposta promossa arrivasse alle urne, hanno messo in campo tutto il proprio arsenale finanziario e non solo per convincere gli elettori a bocciarla. Tra campagne di disinformazione e sostegno ad altre misure referendarie che potrebbero impedirne l’entrata in vigore. Alcuni miliardari, tra cui i cofondatori di Google Larry Page e Sergey Brin, hanno valutato o annunciato di volersene andare. Anche se, come evidenziato da Zucman, sulla carta per avere successo il trasferimento fiscale avrebbe dovuto essere completato entro fine dicembre 2025: il testo infatti individua i potenziali contribuenti in base alla residenza al 1° gennaio 2026. L’eventuale trasferimento di Zuckerberg, ipotizzato per ottobre di quest’anno, sarebbe stato quindi al massimo un tentativo in extremis per tentare di contestare la propria assoggettabilità alla tassa, ma non una garanzia di esserne escluso.

L'articolo Mark Zuckerberg si prepara a pagare la tassa californiana sui miliardari. Meta gli dà nuove azioni per blindarlo per otto anni proviene da Il Fatto Quotidiano.

In the heart of the historic working-class and Latino Mission district in San Francisco, the door of a ground-floor unit next to a trendy coffee shop keeps opening. A private shuttle that ferries tech workers to their Silicon Valley headquarters farther south passes by every morning. The 796 sq.ft. (74-square-meter) apartment, recently renovated and furnished, is thoughtfully laid out, from the small open kitchen to the built-in closets. But it gets very little light. Of its two bedrooms, one has no windows. And it costs $4,750 a month.

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The main investigative unit of the United States Department of Homeland Security (DHS) has been vigorously promoting on social media an effort it considers crucial in the final weeks before the midterms: pursuing alleged large-scale election fraud by noncitizens — a claim that has obsessed President Donald Trump despite a lack of evidence.

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The California High-Speed Rail Authority's board voted 7–2 to strip CEO Ian Choudri of his authority to independently approve and manage contracts worth less than $25 million after an investigation uncovered questionable taxpayer-funded expenses by four consulting firms. An audit found that $593,000 in travel expenses lacked proper justification or violated state rules, including premium airline tickets and rideshare trips to places like a cigar lounge and an escape room. Consultants also billed taxpayers for rides to and from Choudri's home, sometimes late at night. The authority paid the four consulting firms roughly $2 million in travel costs; the inspector general reviewed about $1.15 million of that total and found $680,500 had no prior approval.

The post Brickbat: Perks of the Job appeared first on Reason Magazine.

A proposed "wealth tax" on California's billionaires could backfire and cost the state tens of billions of dollars in the long run.

If the proposed tax drives wealthier residents out of the state, California could end up losing between $1 billion and $3.5 billion annually in income taxes, according to a working paper published this week. A pair of researchers at Stanford University warn that the state could end up losing an estimated $39 billion because of the consequences of the wealth tax.

"These findings suggest that the Billionaire Tax Act will not fulfill the primary functions for which it was designed," write researchers Benjamin Jaros and Joshua Rauh.

Voters in California will decide next month whether to impose the one-time, 5 percent tax when they vote on Proposition 40. The ballot measure is dividing Democrats—Gov. Gavin Newsom opposes it, while progressive Rep. Ro Khanna (D–Calif.) claims it is the "most important ballot initiative in America and a fight for the soul of our party."

And it's already spurring some billionaires to flee the state—including venture capitalist Peter Thiel and Google co-founder Larry Page. Including those two, the seven billionaires who have publicly said they are leaving the state represent more than $539 billion of the nearly $1.9 trillion aggregate net worth of California's billionaires, the researchers note.

With other departures likely happening more quietly, the new study estimates that the tax will generate about $30 billion, a far cry from the $100 billion that the tax's supporters expect. The "behavioral response" from billionaires in California "has eroded most of the projected tax base," write Jaros and Rauh.

That's still a pretty big pot of revenue. In the long run, however, the state is likely to lose out.

After running 100,000 simulations using different assumptions, the two researchers report that "85 percent of plausible outcomes produce a negative" result in state revenue.

Other recent experiments with special taxes on wealth have backfired in similar ways. In response to a new wealth tax in Washington State, Jeff Bezos relocated to Florida, and iconic Seattle brand Starbucks shifted more of its corporate headquarters to Tennessee. Studies have shown that a "millionaires tax" in Massachusetts contributed to wealth moving out of that state.

Capital is always mobile, despite the best efforts of politicians. And if you were a billionaire living in California, why would you stick around?

Polls show voters are narrowly divided over Proposition 40. A Politico poll published earlier this month showed 46 percent of voters plan to vote for the measure, while 43 percent oppose it. Voters were similarly divided when asked if they expected it to pass or not.

The post California's 'Wealth Tax' Could Cost the State $39 Billion appeared first on Reason Magazine.

Happy Tuesday, and welcome to another edition of Rent Free. This week, we're going to jump right into it with a philosophical question: What is an accessory dwelling unit anyway? 

It's a question that officials in Somerville, Massachusetts, are realizing they didn't know the answer to after learning that a state law allowing ADUs in single-family neighborhoods could also require them to approve three-story backyard mini-apartments. 

As the Boston Globe reported on Sunday, Somerville's "deep ethos in favor of new housing" is being tested by the extent of the state law. Elected officials are describing the potential for three-story ADUs as a "joke," and the area's state lawmakers, including one who voted for the state law, are demanding reforms to stop them. 

The law in question was a statewide accessory dwelling unit (ADU) legalization tucked inside a major housing package of mostly new spending programs that passed in 2024. 

The bill required municipalities to allow ADUs of either 900 square feet or half the size of the primary dwelling (whichever is smaller) anywhere single-family homes are allowed. A subsequent rule issued by state regulators also forbade localities from imposing height and bulk limits on ADUs that are stricter than the limits imposed on primary dwellings. 

That latter rule is what's causing Somerville's freakout. 

Because the town allows triple-decker apartments (a three-story triplex common in New England) in all its single-family zones, the state rule means that it must also allow ADUs to be three stories tall. 

The Globe story notes that the mini-triple-deckers could still only be 900 square feet, meaning each floor of a mini-triple-decker would have to be pretty small. Thus far, no one has proposed building an ADU tower in Somerville. 

Even so, the town is worried that someone will eventually propose one of these "out-of-scale" units that it'll have to approve. Its officials are now agitating for changes to the state law to prevent this. 

On the one hand, one can perhaps understand why Somerville officials feel blindsided. 

The text of the 2024 ADU law allows localities to set "reasonable" height and bulk limits on accessory units. It was state regulators who decided after the law's passage that requiring ADUs to be shorter than the primary unit was "unreasonable." 

On the other hand, allowing a second home on a lot to be as tall as the first house sounds "reasonable" enough. Can one complain about out-of-scale development when the new unit is the same height as an existing home and a little bit smaller?

Somerville is not the first city where people's own colloquial definition of an accessory unit as "a tiny home that doesn't bother anyone" has clashed with official regulatory definitions that allow ADUs to be a fair bit bigger. 

San Diego's ADU Bonus program once allowed a technically unlimited number of ADUs to be built on single-family parcels near transit stops. (Height and bulk regulations imposed practical limits on how many units could fit on a site.) 

That enabled developers to build what were, in effect, ADU apartment complexes on large single-family lots throughout the city. This year, the city imposed new restrictions to stop these "monster" ADU developments, including a per-lot accessory unit cap. 

The latest dust-up in Somerville, like the San Diego controversy before it, provides several lessons about the realities of housing reform. 

The first is that the definition of "accessory dwelling unit" is completely arbitrary. 

In Massachusetts, an ADU is a 900-square-foot home that can be one story or three stories, depending on the town and zoning district it's being built in. 

In Montana, it's a 1,000-square-foot unit. In California, state law can require localities to allow ADUs as large as 1,200 square feet. Under certain conditions, these ADUs can even be sold separately from the main house. 

At a certain point, an accessory dwelling unit is just a dwelling unit. A house is a house. 

The second lesson is that any ADU reform that is actually intended to produce new housing units is going to cause controversy.  

State and local laws allowing ADUs have been one of the more common forms of housing reforms to pass. 

Supply-boosters see them as a way to get a modest number of new units. Supply skeptics don't see much to object to about allowing someone to install a kitchenette and bathroom in their garage.  

If the ADU regulations don't allow much more than the garage conversion, supply-boosters will be disappointed and push for expansions of the law. California passed dozens of ADU laws before they started enabling actual units to be built. 

If an ADU law actually allows more homes, the ADUs will look like homes, and the supply skeptics will be mad. 

No amount of branding or planning will resolve the inherent conflict of some people wanting more development while others oppose it in their neighborhoods. 

Thus far, Massachusetts' ADU law has been modestly productive. The state's ADU survey reports that 2,048 ADU permits have been issued since the state law went into effect in January 2025. About half of those units are attached ADUs (think the garage with the kitchenette). 

That's a little under 10 percent of Massachusetts total housing production during that time, per the Census Bureau's building permit survey.  

At 50 units permitted, Somerville has actually approved the second most ADUs of any jurisdiction in the state. (Boston has only approved 49.) 

But now that it's facing the prospect of allowing ADUs that look like actual homes, it's starting to get cold feet about the new law. 

Quick Links

• Speaking of Massachusetts, the town of Marblehead (of "are we kind of being pricks?" fame) has at last had its rezoning plan, which allows apartments in more districts, accepted by state officials. 
• While Spain is tightening its tenant protections and rent controls in the face of housing protests, Portugal is trying to remove regulations on its rental housing industry. Either way, housing protesters are clashing with police. 
• Single-family homebuilder confidence continues to drop. 
• The Urban Institute has a new white paper on whether data center development is coming at the expense of housing development. 
• A new report on home construction in Chicago finds that the practice of aldermanic privilege (where individual aldermen can veto projects in their district) is strangling development. 

The post ADU Nihilism appeared first on Reason Magazine.

The Donald Trump administration dubbed it Operation Protect the Vote and on Monday focused its efforts on trying to substantiate the conspiracy theories promoted by the president and members of his administration: that large numbers of undocumented immigrants in California vote illegally for Democrats and that the state’s voter rolls still contain deceased individuals and people who have moved to other states. The charges announced, however, do not prove those claims.

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One of the factors that led Greg Pirio to buy his house in Loudoun County, in northern Virginia, 14 years ago, was the nature surrounding it. A historian specializing in Africa, he loved to take long walks with his dog and listen to the birds. Three years ago, a large data center was installed just a hundred meters from his door. Since it began operating a year and a half ago, the birdsong has been replaced by a constant buzzing together with fumes that cause headaches, conjunctivitis and respiratory problems.

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Google Maps still shows a prosperous image of Pacific Place, a business center on the busy Valley boulevard in a suburb east of Los Angeles, California. But that picture no longer matches reality. The windows of a mental health clinic and a real estate agency have been boarded up to protect the premises from vandalism. One by one, shops pulled down their shutters until the mall was almost deserted. Several businesses belonging to an enigmatic figure also closed: Guojun Xuan, a wealthy Chinese immigrant who is at the center of a chilling case involving the alleged mistreatment of 21 children at his Arcadia mansion.

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This story originally appeared in Common Dreams on Oct. 06, 2026. It is shared here under a Creative Commons (CC BY-NC-ND 3.0) license.

“Keep our city out of your reckless war talk,” said San Diego’s mayor, Todd Gloria, Monday night after President Donald Trump’s rambling speech at a rally in Nebraska included a particularly violent mention of the California city.

Gloria was among several Democratic political leaders who were incensed after Trump—moments after predicted the Republican Party would see a “tremendous victory” in the November 3 midterm elections—suggested that he would not object to an Iranian military or nuclear attack on San Diego and Los Angeles.

The president said that soaring prices for gas, groceries, and other essentials are a “small price to pay for keeping the world safe—keeping our country safe.”

He warned that Iran could “take out a city,” before adding that he would “let them” attack the two deep-blue cities—home to a collective 5.2 million people, with more than 20 million residents in the surrounding areas

“Let them take out Los Angeles. Let them take out San Diego,” Trump said at the rally in Grand Island. “This is a very small price to pay… It’s gonna be over very soon.”

The crowd responded to Trump’s comments with laughter and cheers. The president has frequently made Democratic strongholds like Los Angeles, Chicago, and his own hometown of New York City the targets of rhetorical attacks. He has also targeted those cities with the deployment of armed federal agents as part of his mass deportation agenda.

California Gov. Gavin Newsom, a Democrat whose name has been floated as a potential 2028 presidential candidate, condemned Trump’s remarks as “deranged and dangerous.”

“After sending the National Guard and Marines to occupy California, Donald Trump is now saying our foreign enemies should ‘take out’ Los Angeles and San Diego,” said Newsom, who later criticized Trump’s vice president and secretary of state for not speaking out against the comments.

“The SILENCE from JD Vance and Marco Rubio today is deafening,” said the governor.

Gloria added that San Diego, which is home to major military installations, “is not collateral damage. We are not expendable. And we are never a ‘small price to pay.’”

Los Angeles Mayor Karen Bass accused Trump of compromising the safety of the nation’s second-largest city.

“The role of a president is to protect the country, not to actively threaten it and encourage attacks on American lives,” said Bass. “In the face of irresponsible threats, as Angelenos, we know how to stand together and protect our city.”

Jim Desmond, a Republican running for Congress in California’s 48th District, which lies in San Diego, was also quick to distance himself from the president’s comments.

Some observers claimed the president had simply been speaking in an “especially confusing style,” as journalist Daniel Dale suggested, and did not intend to suggest that the two cities could be acceptable collateral damage.

“Of course you can say it’s inappropriate regardless for the president to casually float the possibility of a city being wiped out,” he added.

Trump’s comments came days after it was reported that the Pentagon is prepared to send thousands more troops and a third aircraft carrier to the Middle East, as talks between the US and Iran remain stalled. Gas prices remain elevated, at $4.36 per gallon on average, and nearly two-thirds of respondents to an Associated Press poll in June said they disapproved of how Trump had handled the war, which he joined Israel in starting in February without congressional approval.

Sen. Alex Padilla (D-Calif.) had a succinct response to Trump’s remarks, referring to the constitutional amendment that allows members of a president’s Cabinet to remove him from office on the ground that they cannot fulfill the duties of the president.

“Twenty-fifth amendment NOW,” said Padilla.

Germany and California parade as climate superpowers – yet both import energy, destroy industry and hand supply chains to Beijing. Western virtue, says Tilak Doshi, is made in Chinese coal-fired factories.

The post Beijing’s Useful Idiots: Germany, California and the Green Road to Chinese Supremacy appeared first on The Daily Sceptic.