Remember that this is a state policy, so it's pretty easy to keep the wealth out of state and avoid the taxes. California already has the highest capital gains

Remember that this is a state policy, so it's pretty easy to keep the wealth out of state and avoid the taxes. California already has the highest capital gains taxes in the US and 2nd-highest in the world, so such tax avoidance is extremely common. Coastline can't be moved or hidden, making it much harder to avoid the tax.