Leaders Warn Measure Threatens Investment, Housing Production, and Long-Term Fiscal Stability
SACRAMENTO, CA — Today, a broad and growing coalition of housing, labor, and business leaders announced opposition to the wealth tax, citing concerns about economic impacts, housing production, investment, and the long-term stability of state revenues.
The coalition includes organizations representing affordable housing providers, housing advocates, builders, construction workers, and business organizations that share concerns about the measure’s impact on California’s economy and ability to sustainably fund public priorities.
Together, these organizations represent a broad cross-section of California’s housing community and share concerns that the wealth tax could discourage investment, reduce housing production, and create additional volatility in the state budget.
“This measure puts at risk the very programs California depends on to build housing. From affordable housing funding and financial incentives for builders, to the state agency staffing that reviews entitlements and holds local governments accountable to their housing goals, these are the building blocks of housing production,” said Housing Action Coalition Executive Director Corey Smith. “Stable, sustained investment in these programs is how California closes the housing gap. A measure that undermines the state budget undermines housing.”
“Affordable housing doesn’t get built without investment. A wealth tax may sound appealing in theory, but in practice it risks pushing capital, jobs, and housing investment out of California,” said California Council for Affordable Housing Executive Director Jenna Abbott. “At a time when the state faces a severe housing shortage, policymakers should focus on attracting the resources needed to build affordable homes—not discouraging them.”
“While we believe taxes are good – they’re the price of living in a society, and we generally need more of them – poorly-designed taxes are bad, and can lead to both economic and political harm,” said California YIMBY CEO Brian Hanlon and Director of Industry Partnerships Noah Ornstein in a piece posted on their website. “The billionaire tax is poorly-designed: It will likely harm housing production by discouraging investment in California. It will likely harm overall tax revenues by driving out the taxpayers who already pay the most taxes.”
“California policymakers have struggled for decades with the state’s volatile revenue system, which has made crafting an annual budget a constant challenge and prevented state leaders from providing stable, sustainable investments in affordable housing and other top state priorities,” California Housing Consortium Executive Director Ray Pearl. “The wealth tax only compounds the volatility, adding uncertainty to both the economy and state budget.”
“This isn’t a debate about whether the wealthiest Californians should pay more—we believe they should. It’s a question of whether this measure will deliver the outcomes our state needs,” said Housing California Executive Director Chione Lucina Muñoz Flegal. “To truly address our affordability crisis, California needs permanent, scaled investments that deliver stable, lasting impact. This measure simply doesn’t achieve that.”
Other labor and business leaders, whose organizations previously announced opposition to the wealth tax, voiced their concerns.
“The wealth tax will drive away capital when we need it the most, threatening construction jobs, our infrastructure, and California’s future,” said State Building and Construction Trades Council of California President Chris Hannan. “When investment leaves California, critical housing, transportation, school, and water projects leave with it. We can’t let that happen.”
“At a time when Californians are demanding economic growth, housing, and good-paying jobs, this initiative moves us in the wrong direction. Rather than attracting investment and creating opportunity, it will drive employers, jobs, and capital out of California,” said United Brotherhood of Carpenters Vice-President Pete Rodriguez. “Carpenters believe in a fair tax system that supports working people and economic prosperity. This measure does neither.”
“We all want a California that is more affordable, more equitable, and more prosperous. But we cannot tax our way to those goals by discouraging the investment and innovation that fuel economic growth,” said Bay Area Council President and CEO Libby Schaaf. “The path forward is creating more housing, improving education, and expanding economic opportunity—not imposing a wealth tax that risks shrinking the resources available to support those priorities.”
This opposition builds on the recent launch of a new committee to fight the wealth tax – Californians to Protect Funding for Schools, Healthcare and Public Safety – led by the California Medical Association (CMA), California Primary Care Association (CPCA), and California School Boards Association (CSBA). A new digital ad, “Common” is running statewide, outlining the devastating impacts of the “reckless wealth tax experiment” on the state’s core priorities and services.
A broad and diverse coalition representing healthcare providers, educators, housing advocates, labor leaders, and others continue to voice concerns about the wealth tax and its potential impacts on California’s economy and state budget.
Organizations that have announced opposition to the wealth tax in recent weeks include: the California Teachers Association (CTA), Planned Parenthood Affiliates of California (PPAC), California Hospital Association (CHA), and Peace Officers Research Association (PORAC), among many others. A full list of the growing coalition is here.
For more information, visit: ProtectCAFunding.org.