The socialist left was on parade in the final innings of 2025. The long cold shadow cast by “The 2026 Billionaire Tax Act,” a ballot initiative in California to be voted on in November, has led tech billionaires to take flight out of the state and land in the zero-income-tax paradises of Texas and Florida. The initiative seeks a one-time 5 percent tax on the worldwide net worth of anyone stupid enough to be a Californian with assets worth more than $1 billion as of January 1, 2026. That meant anyone in the three comma club had to hightail it out before Governor Gavin Newsom could bellow “Happy New Year.”

With more than $38 trillion in debt, America is rolling toward the brink of a precipice that will destroy it

The well-heeled leading lights of West Coast venture capital wasted no time in advertising their change of domicile. Peter Thiel announced he was opening an office for his personal investment firm in Miami. (His venture firm, Founders Fund, had already opened an office there in 2020.) David Sacks, who also serves as the Trump administration’s AI and crypto czar, and Chamath Palihapitiya both decamped from the Bay Area and planted their flags in Austin. Palihapitiya posted on social media that he knew of friends and acquaintances with a combined net worth of around $500 billion who were leaving California permanently due to the state’s proposed wealth tax.

The ballot measure is being proposed by a union representing more than 120,000 healthcare workers, the guardians of bedpans, budget shortfalls and Medicaid scams. They expect the initiative to generate $100 billion in additional tax revenue for the state, but even the free TurboTax chatbot will tell you that’s wishful thinking and that there’s no way this is only a one-time tax.

Undaunted by this capital flight, Zohran Mamdani, the Mayor of New York City, served up a socialist hymn in his inaugural address on January 1 so brazenly hyena-like it would make his comrade Lenin proud. Mamdani bragged that his administration “will replace the frigidity of rugged individualism with the warmth of collectivism.” He continued: “We will deliver universal childcare for the many by taxing the wealthiest few.”

Commentators recoiled at his dim-witted connotations of Bolshevik history, seemingly unaware of its gulags, famines, showtrials and confiscations. I somewhat admire him for saying it all with the false, idiotic grin of a game-show host. Yet for all that, I found the deeper chill lay in Mamdani’s dismissal of the solitary soul. Individuality is dead, according to Mamdani. Only the hive endures.

One of the core tenets of the left is that our lives are basically insignificant. Sure, its proponents may genuflect before the cook or the cab driver, singing “Hallelujah, praise be” to the common man. The mushy chorus will gain volume if he is a recent immigrant. And they will elevate an individual minority victim to the status of sacred divinity. But when it comes down to achieving greatness, the only significant thing the left believes in is a crowd and a government. It believes in history without names.

Should you discredit this helpless philosophy by doing something worthy of admiration – say, by altering the course of history and changing the world for the better – the left would rather dismiss you than discard its views. The hisses and curses thrown by the socialist left at anyone who has achieved success in business is quite something. Billionaires are the only minority group who seem to deserve no protection. In Senator Bernie Sanders’s phrase – like the kulaks under Lenin – “They should not exist.”

Representative Alexandria Ocasio-Cortez has a particularly intense hatred for Elon Musk. During one bureaucratic snooze-fest of a meeting, she insisted that Musk is “not a scientist, he is not an engineer. He is a billionaire con man with a lot of money.”

The vituperation crescendoed in November when Tesla’s shareholders voted to grant Musk a pay package that would award him $1 trillion in shares if he were to achieve the improbable feats laid out in his contract. Bernie Sanders called the compensation plan “grossly immoral.” Bill Clinton’s former labor secretary Robert Reich said it was a grotesque mockery, and even his holiness Pope Leo XIV chimed in, saying the pay package was emblematic of the loss of “the value of human life, of the family, of the value of society.”

Of course “luck” or “rigged” or “grotesque” or “trouble” is the tribute incompetence pays to skill. But the deeper philosophical point is more damning: the left simply doesn’t believe that any individual could be so important that it’s worth paying him $1 trillion.

With more than $38 trillion in debt, America is rolling toward the brink of a precipice that will destroy it. Since neither political party believes in austerity, the only way to solve that problem is through economic growth. And the only way to create the growth in wealth necessary to pay off those debts is for entrepreneurs to build companies and make discoveries that will make them worth billions. (The US could default, but we’ll leave that aside.)

Innovators will stop creating, not with a bang but with a shrug

The truth is, the left may hate billionaires, it may condemn trillionaires, but it desperately needs them. We can even run some back-of-the-envelope calculations on how badly the left needs them. In a famous 2004 paper, the Nobel Prize-winning economist William Nordhaus estimated that innovators capture only a minuscule portion of the social returns to their inventions and discoveries, something on the order of 2.2 percent of the social surplus generated by their creations. This means the vast majority of the value from tech advances flows to consumers. Consumers get lower prices, better products, faster services, positive spillovers everywhere, while innovators get… well, not much. Not much at all. If an entrepreneur is worth $2 billion, then he has probably created $98 billion worth of benefits to the public. (And Elizabeth Warren says it’s the billionaires who are greedy.)

At any rate, here’s the final step in our estimate for the socialists. The total net worth of all billionaires in the US is $8 trillion. Even if the government seized everything today, that would only cover the budget for one year of spending, plus the interest on the debt. They need more.

So how much new wealth has to be created by innovators to keep this country afloat? To wipe out the full $38 trillion US debt in a decade via innovation alone, according to Nordhaus’s model, Sanders, Mamdani and the others need about 3,300 new billionaires (or roughly 500 at today’s average billionaire net worth of $6 billion.) Even slashing just half the national debt would demand three fresh trillionaires. To put this in perspective, there are only about a thousand billionaires in the US today. Contrary to its public pronouncements, then, it appears the left has a rather naive and touching faith in capitalism.

It is ironic that socialists need new billionaires and trillionaires more than libertarians, who could manage the debt with massive cuts to spending.

Socialists and other egalitarians always underestimate the effects of taxation on innovation. They never understand that people won’t put in the work at 3 a.m. or take the giant risks necessary for new creations if the return on investment is greatly diminished. Innovators will stop creating, not with a bang, but with a shrug. History is full of case studies and we don’t even need to cite Cuba, Venezuela or North Korea. We need only look to Europe, where high taxes and tight regulations have frozen countries’ economies, causing standards of living to stagnate in gray mediocrity for decades. The left’s annihilation of distinctions promises warmth but only delivers cold.

To alleviate poverty is a worthy goal. But the overall decline in global poverty over the past century is due to the free market, not governments – least of all the redistribution of wealth. Housing, healthcare and education become more and more expensive every year, but this is because government constrains supply and subsidizes demand. Regulations hurt the poor far more than any billionaire could.

The ideologues of resentment say we live in a post-heroic age, and in the end they may very well get their wish for a world free of heroes, billionaires and troublesome innovators. Of course, only then will they discover, in the silence of their collective hive, that the lights have gone out, the debts remain unpaid and the only thing left to redistribute is the blame.