Ask American voters whether they are more likely to end up homeless or end up a billionaire, and by better than two to one they’ll say homeless. The same poll finds a majority believe billionaires got rich through exploiting workers and consumers rather than through hard work and innovation.
I’m 23. I built a company in a dorm room, sold it, and put the money into the next one. I am trying to become the thing my own generation has decided should not exist.
Proposition 40 would take 5 percent of the net worth of roughly 200 Californians in a single levy. Supporters call it a one-time correction, whereas I’d call it the first policy in America written on the assumption that a large fortune is evidence of wrongdoing rather than evidence of something built.
You can watch the assumption forming. Pew found that 33 percent of young Americans call extreme wealth morally wrong, against 10 percent of Americans over 65. Let’s keep in mind, however, that California is the fourth-largest economy on earth, ahead of Britain and Japan, because for a century it was the place you moved to when you wanted to make something great.
Hollywood was the first version of this. Louis B. Mayer was born in Minsk and died the most powerful man in American film. Sergey Brin’s family left Moscow when he was six, and he built Google. Mine left Russia when I was three. People have been coming to California for a hundred years for the same reason my parents came to America — it was the place where a better life was still available to anybody willing to go and take it.
America did not become America by teaching young people to aim lower. California did not become an economy the size of Britain’s by accident, and it won’t stay one by accident. The foundation under it is the same one under the country: the rules you start under are the rules you finish under, and what you build stays yours to keep building.
Prop. 40 puts a crack in that.
Take someone worth $100 million. They own the house, the security, the freedom to never work again, every material thing money buys. Now take someone worth $2 billion. Their day is identical. The additional $1.9 billion buys nothing — it doesn’t materially change the life you live.
At that level, wealth stops being primarily about what you can personally consume and becomes ownership: stock in a business, investments, capital. When I look at a founder who has built a company employing 10,000 people, I don’t see someone who simply accumulated $2 billion. I see 10,000 paychecks, thousands of suppliers, investors who put capital at risk and a business generating economic activity far beyond the founder’s personal spending.
Plus, the only thing separating a $100 million fortune from a $2 billion one is that the second person kept building after the point where building stopped improving their own life. That is the exact behavior Prop. 40 puts a price on.
Imagine two founders. One sells early, cashes out and moves to Austin. The other keeps her equity, keeps hiring in San Jose and eventually crosses the billion-dollar threshold on paper. The second founder could face a nine-figure levy on wealth that she has not sold.
Mark Cuban made this point to Rep. Ro Khanna in August and got a lecture about liquidity in return: Khanna’s response was to propose letting founders pledge their shares to the state in exchange for a government loan.
California would be taxing the decision to keep going.
If California wants billionaires to contribute more, fine. But it should distinguish between wealth that sits idle and wealth tied to businesses still creating jobs. If a founder keeps their company headquartered in California, keeps hiring Californians and keeps reinvesting in the business, the tax code should recognize that contribution rather than treating her exactly like someone who has simply accumulated financial assets.
I actually think successful founders should get better tax treatment, not worse — and not because they deserve applause. Because we already know the mechanism works and we already use it. Section 1202 of the tax code exempts gains on small business stock from federal tax if you hold it long enough. In July 2025, Congress expanded it: bigger exclusion, larger qualifying companies, benefits starting at three years instead of five. That’s the federal government paying people to build companies and stay in them.
California is now proposing to run that policy in reverse, on the same behavior, in the same year. Right now we have a code that rewards holding at the federal level and a ballot measure that punishes it at the state level, and we wonder why founders keep buying houses in Texas.
The state’s own analyst concedes that Prop. 40 could reduce ongoing income-tax revenue by less than $1 billion a year, partly because some billionaires may leave California. The accountants will litigate that for years, but the cultural bill comes due faster and nobody will send an invoice for it.
We are telling any young person with an idea and no money that there is something morally suspect about building too much. What happens when they believe us?
Emil Barr is the founder of AI workforce development platform Flashpass