Los Angeles Socialists Propose Wealth Tax on “Overpaid CEOs”
In Los Angeles, socialists are organizing a new wealth tax aimed at what they label “overpaid CEOs.” This latest initiative seems to put Elon Musk in the spotlight, with plans for a launch event outside his Tesla Diner.
On Wednesday, members of the hotel workers union, who played a role in implementing the controversial $30 an hour wage, stood outside Musk’s establishment gathering signatures for a measure dubbed the “overpaid CEO tax.”
This initiative, which is supported by the democratic socialist-aligned Unite Here Local 11 along with other labor unions, focuses on companies with over 1,000 employees whose top executives earn more than 50 times the median salary for workers in Los Angeles.
If enacted, the tax would impose an additional city business tax, ranging from 1 to 10 times the current rate, which sits around 0.1% to 0.425% of gross revenue.
According to Kurt Petersen, co-president of Unite Here Local 11, there’s a serious and growing divide in Los Angeles. He argues that while CEOs accumulate wealth, employees often have to juggle multiple jobs just to make ends meet for rent and medical bills.
Supporters believe that if voters approve the tax, it could generate approximately $500 million annually, with funds earmarked for expanding low-income housing, sidewalk repairs, and other city projects.
However, local business leaders express concerns about the tax proposal, describing it as a step backward for the city’s economic health. George Francisco, co-chair of the LA BizFed Responsible Governance Committee and president of the Westside Chamber of Commerce Council, commented that increasing taxes on businesses doesn’t address issues like fiscal mismanagement.
He pointed out that Los Angeles and California already rely heavily on a small number of high-income earners for public services funding, referring to it as an “inverted pyramid” tax system. Francisco warned that similar measures aimed at billionaires have historically led to job and investment losses, as businesses opt to relocate to states with friendlier tax policies.
Notably, Musk himself moved Tesla and SpaceX from California to Texas in 2024.
Francisco cautioned that such taxes often start by targeting billionaires but eventually affect everyone. “If you’ve been following these trends, it’s clear how billionaires’ taxes can turn into taxes for the rest of us,” he said, summarizing the left’s ongoing pursuit of taxing the wealthy.
Unite Local 11 strongly supports progressive City Council members like Eunice Hernandez and Hugo Sotomartínez, both of whom were elected with robust backing from unions. They also helped drive the City Council’s decision in 2023 to raise the minimum wage for hotel and airport workers to $30 an hour by 2028, a move that unions have branded as “Olympic wages” in anticipation of the upcoming Olympics.
Up in San Francisco, voters passed a similar CEO tax last year, which has drawn warnings from business leaders about potential cuts to jobs and investments.
To get this newest measure on the November ballot, its supporters need to gather around 140,000 valid signatures from registered voters in Los Angeles within the next 120 days.
