U.S. Senator Ted Cruz [Reuters=Yonhap News]

U.S. Senator Ted Cruz (Republican-Texas) has voiced criticism against high wealth taxes, such as the "billionaire tax" proposed by the Democratic Party.

Addressing the "Milken Global Conference 2026," an economic and financial forum held at the Beverly Hilton Hotel in Los Angeles, California, on the 4th (local time), Senator Cruz quipped, "I've recommended California Governor Gavin Newsom multiple times as the best real estate agent in Texas this year, because no one in history has sold more Texas homes than Newsom."

This was a satirical jab at the current situation where wealthy individuals are leaving California for Texas as the state attempts to introduce high taxes, including a wealth tax.

He further explained, "People are leaving blue states (states with a Democratic majority) that have high taxes and regulations, and moving to red states (states with a Republican majority)."

As an example, he cited the statistics from U-Haul, a moving truck rental company frequently used by Americans, stating, "The price of a U-Haul from Austin, Texas, to Silicon Valley is $74, but the reverse is $5,000. This is a market signal."

California is expected to vote on a wealth tax proposal, dubbed the "billionaire tax," this November. The proposal aims to impose a one-time tax of 5% on the net worth of individuals with over $1 billion (approximately 1.46 trillion won) to fund low-income healthcare programs.

Kevin Hassett, Chairman of the White House National Economic Council (NEC) [Reuters=Yonhap News]

Kevin Hassett, Chairman of the White House National Economic Council (NEC), who was also present, supported Senator Cruz's remarks.

Hassett pointed out, "A 5% tax on assets is equivalent to a 100% tax on capital gains, given that the risk-free interest rate on 30-year U.S. Treasury bonds is 5%." He added, "Just as no one would work if there was a 100% tax on wages, investment would completely halt if there was a 100% tax on capital."

He argued that instead of collecting money from the wealthy and redistributing it, opportunities for investment should be provided to low-income individuals.

Both Hassett and Cruz mentioned tax-deferred investment accounts, also known as "Trump accounts."

This program involves opening an account for children born between 2025 and 2028 and providing them with an initial investment of $1,000.

Hassett added, "The 'Trump account' gives the socially disadvantaged the opportunity to experience the magic of compound interest."

The Milken Global Conference is an annual event hosted by the Milken Institute, a non-profit economic research organization founded by renowned American investor Michael Milken, since 1998.