Editorial: Los Angeles unions declare war on job creators

Not another tax on California’s most productive citizens. Labor unions in Los Angeles are proposing a ballot initiative called the “Overpaid CEO Tax.” 

The effort is sponsored by the Los Angeles Alliance for a New Economy, which partners with the United Teachers of Los Angeles, UNITE HERE Local 11 (tourism workers) and other unions that have helped make life more unaffordable and public schools even worse.

The campaign explains the initiative, if passed, “would progressively tax large businesses whose CEOs make more than 50 times what their median worker makes.” The higher the ratio, the higher the tax. The goal is to raise $500 million every year from businesses that bother to stick around. 

“A growing and dangerous divide is tearing Los Angeles apart,” complained Local 11 co-president Kurt Petersen. The CEOs “live in their own world,” while workers juggle two or three jobs and “make impossible choices between medicine and rent.” LAist reported he was speaking at a signature-gathering rally before the Tesla Diner, a charging station and eatery in Hollywood.

Petersen missed the irony. Tesla CEO Elon Musk moved its headquarters from Palo Alto to Austin, Texas in 2021. In 2024 he moved SpaceX headquarters from Hawthorne to Starbase, Texas, and X from San Francisco to Bastrop, Texas The Lone Star State extracts no state income tax, compared to 14.4% for the Golden State’s top rate paid by CEOs.

Musk’s value can be seen in the number of orbital launch attempts in 2025, with SpaceX dominating global efforts. “Indeed, SpaceX launched nearly twice as many orbital missions as China did this year, and the company’s 2025 output represented about 85% of the United States’ total tally,” reported Mike Wall at Space.com. That’s the value of one CEO genius. 

Company and jobs exits hurt real people. According to the Bureau of Labor Statistics, in November the unemployment rate for Texas was 4.2%, below the 4.6% national rate. But in California it was 5.5%, the highest for any state. It was even higher for the L.A.-Long Beach-Glendale metropolitan area, 5.7%.

The Overpaid CEO Tax would better be called the Exiting CEO and Jobs Tax. That could be imposed on top of a statewide initiative called the California Billionaire Tax Act. Its website explained it would be a “one time” – yeah, right – “5% emergency billionaire tax” – not on income, but their entire wealth. It supposedly would pay for health care and other needed programs. Our editorial against it urged, “Proposed California wealth tax is absurd and must be defeated.”

There’s an old saying: Capital is the most mobile factor of production. No wonder, as he raced across the border in 2021, Musk charged California had become “the land of overregulation, overlitigation, overtaxation and scorn.”

In response to the tax-increase proposals, former state Sen. John Moorlach told us CEOs should “go on the offensive. Instead of being passive, be aggressive. Go after the unions.” Ballot measures could include tax cuts and pension reform for unionized government workers.

Not just CEOs, but all of us must step up and oppose all tax increases. Otherwise, more companies will exit the state – and take the best jobs with them.