California Republican gubernatorial candidate Steve Hilton is warning that a proposed billionaire tax would further strain the state’s economy, arguing that California is already losing businesses, investment and tax revenue as residents grapple with high costs.

California gubernatorial candidate Steve Hilton joined FOX Business’ Maria Bartiromo on “Mornings with Maria” to discuss the proposal, which opponents say could drive more wealthy residents and employers out of the state if enacted.

“It’s already cost California billions of dollars in lost tax revenue because of the amount of wealth that’s already left the state,” Hilton said. “Just because of the threat of this insane tax.”

Lawmakers backing the proposal argue the state’s wealthiest residents should contribute more, while opponents contend California’s existing tax burden is already encouraging people and companies to relocate. Hilton argued the state’s top earners already shoulder a significant share of California’s income tax collections and questioned whether higher taxes would improve public services.

Beyond the billionaire tax debate, Hilton said rising labor costs, energy prices and regulations are making California less competitive. He argued repeated minimum wage increases create “a kind of doom loop” by raising business costs, which are then passed on to consumers.

Hilton also warned that businesses are scaling back hiring, increasing automation or leaving the state altogether because operating costs have become too high.

“If we don’t face up to the reality, California’s economy is going to absolutely collapse,” Hilton said.

Hilton said he would instead pursue lower taxes, reduced government spending and fewer regulations, arguing those policies would help attract employers, expand investment and make California more affordable for residents.