Wealth Tax Would Accelerate California Decline Warns Rep Kevin Kiley [WATCH]

A discussion involving Rep. Kevin Kiley, Fox Business hosts Dagen McDowell and David Asman focused on California’s continued population decline, mounting budget deficits, and renewed debate over proposals such as a wealth tax, which critics argue could accelerate the state’s financial instability.

Kiley said California’s economic challenges are directly tied to residents leaving the state, particularly higher earners who contribute a disproportionate share of tax revenue.

“Exactly, and this has been very precisely measured in terms of how much revenue California has had to give up because of people leaving,” Kiley said.

“In fact, for four straight years in California, we led the nation in outbound U haul rentals.”

He noted that California’s population trajectory has shifted sharply in recent years.

“California’s population continued to grow since 1850 it was only with Gavin Newsom as governor that it began to decline,” Kiley said.

Kiley emphasized the fiscal consequences of losing top earners.

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“And here’s the important thing to note is that in California, the top 1% of earners can account for up to 50% of tax revenue, and so when you send those folks out of the state, then that can actually cause our entire financial setup to collapse,” he said.

“It’s one of the reasons California has been running these massive deficits in recent years.”

He added that economic pressure is affecting residents across income levels.

“But I do want to add by the way, that it’s not just those who are well off that are suffering under the system,” Kiley said.

“California has the highest poverty rate, in the United States the highest unemployment rate, and most of the people leaving are leaving just because they can’t afford to live here.”

McDowell raised concerns about the impact of a proposed wealth tax, referencing warnings from prominent legal figures.

“And this celebrity lawyer, Alex Spiro has who’s previously represented people like Kim Kardashian and Elon Musk, who picked up and left,” McDowell said.

She added that Spiro had warned Gov. Gavin Newsom that, “quote, it will trigger an exodus this wealth tax of capital innovation from California and our clients have made clear they will permanently relocate if subjected to this tax. Will he listen?”

Kiley said opposition to the proposal is growing but warned that the issue remains active.

“Well, I sure hope so,” he said.

“You know, Newsom has said that he is not in favor of the wealth tax, which is maybe the one tax he’s ever not been in favor of, but they’re trying to get it on the ballot.”

He said the proposal must be challenged to prevent further economic decline.

“And so this is something that we absolutely have to fight against, because, you know, as we’ve seen, California continues to spend more and more money, and yet our citizens get less and less in return,” Kiley said.

Kiley also referenced interest in broader fiscal oversight.

“And so hey, if Ro Khanna, I heard, wants to do a full independent audit of California, I think that’d be a good thing,” he said.

“I’d be welcome. I’d welcome the opportunity to partner with him on that, because I think there is a lot more that we will discover about how our taxpayers’ resources are getting wasted.”

Asman closed the discussion by expressing cautious support for reform efforts.

“Good luck on that. I hope you can follow through on it,” Asman said.

“Of course, you’re not going to get much support from the from the general state legislature, but independents like yourself can do a lot. Thank you very much.”

WATCH:

The insane “wealth tax” being proposed would cause innovators to leave California when we’re already #1 in unemployment. This would also collapse our state’s shaky finances, as top earners account for 50 percent of tax revenue. pic.twitter.com/80W3X6g2US

— Kevin Kiley (@KevinKileyCA) December 31, 2025