Make billionaires part of the solution

California has long had a complicated relationship with wealth. The state creates it at a scale unmatched anywhere in the country, driven by industries that have reshaped the global economy. Yet public policy often treats that wealth as something to penalize rather than engage.

That tension is resurfacing in proposals for a statewide billionaire tax and other measures aimed at high earners and large corporations, including CEO taxes in Los Angeles and San Francisco. These policies are often framed as responses to inequality. But they also raise a more fundamental question: What should California expect from the people who benefit most from its economy?

The state's reliance on wealth creation runs deep. California already has one of the highest tax burdens in the country, and the top 1% accounts for more than 40% of all personal income tax payments. That revenue funds public education, healthcare, infrastructure and social services. When high earners relocate or shift investment, the consequences affect budgets, jobs and long-term economic stability.

That reality matters in a modern economy where wealth and talent are increasingly mobile. Companies can scale globally without deep geographic roots, and individuals can move capital quickly to states with more competitive policies. California should be careful not to make staying punitive.

A state billionaire tax, absent federal action on income inequality, makes little sense. It moves the conversation in the wrong direction.

American history offers another model. Andrew Carnegie and John D. Rockefeller helped define a culture in which extraordinary wealth carried expectations beyond accumulation. They competed, in effect, to build libraries, universities, hospitals and museums. Over time, this established a norm: Success was measured by what was built for the public good as much as by net worth.

San Francisco has modern examples as well. E-Loan co-founder Chris Larsen has invested heavily in education, public safety and civic initiatives. Gap Inc. board member Bob Fisher has long supported cultural institutions, including the San Francisco Museum of Modern Art. Both have given substantially to the city of their birth, which helped shape their success.

Of course, billionaires are not a monolith. Some are deeply invested and give from the heart to the communities where they built their fortunes; others remain largely detached. Wealth itself is neither inherently virtuous nor inherently harmful. What matters is whether success creates a broader public benefit.

That question becomes more pressing as modern wealth grows less connected to place. The infrastructure, universities, workforce, public safety systems and civic institutions of cities like San Francisco helped create many of today's fortunes. When enormous wealth is generated in a community without meaningful reinvestment, it can begin to feel less like success and more like extraction.

That frustration is understandable. But bad tax policy will never create civic responsibility or civic pride. Culture and leadership do. California can foster stronger expectations around civic contribution by creating a modern expectation that extraordinary success should leave behind civic infrastructure that outlasts private fortune.

San Francisco has begun experimenting with this approach. To mobilize private resources, Mayor Daniel Lurie engaged a core group of 39 corporate leaders through initiatives like the Partnership for San Francisco and the San Francisco Downtown Development Corp. These executives will fund revitalization projects and will help develop innovative solutions to some of the city's challenges. In return, a more vibrant city helps support both their businesses and everyday San Franciscans alike.

That's exactly what's happening at Embarcadero Plaza, where half of the estimated $40 million cost to turn the plaza into a new park will be covered by the Downtown Development Corp. and billionaire venture capitalist Michael Moritz's Crankstart Foundation.

These efforts reflect an important principle: Participation is part of the social contract. Inclusion in civic councils may sound like special treatment, but participation is not the same as privilege. It broadens responsibility among those with the greatest capacity to contribute and helps ensure solutions are shaped collectively rather than transactionally.

Public-private partnerships can accelerate infrastructure improvements, revitalize downtown corridors, and strengthen arts and cultural institutions. For example, Larsen's investments in the San Francisco Police Department's real-time crime center, along with his contributions to the College of Business at San Francisco State University, have supported broader public safety and educational efforts. Likewise, Fisher's long-standing support of the Museum of Modern Art has helped ensure broad public access to world-class arts and culture. These investments improve the quality of life for everyone.

Governments alone will not move quickly enough to meet every challenge ahead. California's long-term prosperity depends, in part, on its ability to continue attracting and retaining the people and companies that drive growth.

People have every right to expect everyone to pay their fair share. But there is a difference between creating expectations and creating hostility. Expectations are built through civic leadership, where successful individuals and companies invest financially, participate in community life, serve on civic initiatives and help solve shared challenges. That kind of engagement encourages long-term investment and civic participation.

Hostility, by contrast, risks driving both elsewhere.

California can create a culture shaped by the expectation that is driven by competition. The state has an opportunity to define that standard for a new era.

After all, in the Golden State, success should be measured not only by how much gold is made, but by how much is put back into the place it came from.

Alex Bastian is the CEO of the Hotel Council of San Francisco