Nobel Winners Back $100B Billionaire Tax
Six Nobel laureates endorse California's Proposition 40, a one-time 5% wealth tax on billionaires that could raise $100 billion in revenue and spark a global trend
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A UC Berkeley IGS Poll found 48% of likely voters supported Proposition 40, with 41% opposed.
California entrepreneur Eric Schiffer warns the tax could trigger a 'giant sucking sound' of business exits.
Story published. Six Nobel laureates endorse California's Proposition 40, a one-time 5% wealth tax on billionaires that could raise $100 billion in revenue and spark a global trend
A group of six Nobel Prize-winning economists has endorsed a ballot initiative in California that aims to impose a one-time wealth tax on the state's billionaires. The Proposition 40 wealth tax would require California residents worth over $1 billion to pay a 5% tax on their assets, with the potential to raise $100 billion in revenue.
The signatories of the letter endorsing Proposition 40 include Daron Acemoglu, Abhijit Banerjee, Peter Diamond, Esther Duflo, Paul Krugman, and Joseph Stiglitz. These economists believe that the wealth tax could be the start of a global trend, with California being the right place to take this historic step.
California's 250 billionaires are collectively worth $2.3 trillion, and the state income taxes they paid from 2019 to 2025 amounted to only 1.6% of their $1.4 trillion wealth gain. The economists argue that while billionaires have made important contributions, they have also been amply rewarded and have used loopholes to avoid taxes on capital returns, allowing their wealth to compound further.
The Service Employees International Union-United Healthcare Workers West is the union pushing for Proposition 40. The proposition's success could have significant implications, not just for California but also for the federal government and other countries. The economists believe that the wealth tax could help address income inequality and raise revenue for public services.
## Why it matters The proposed wealth tax is significant because it could spark a global trend in taxing the ultra-wealthy. If successful, it could lead to similar initiatives in other states and countries, potentially raising billions of dollars in revenue and addressing income inequality. The fact that six Nobel Prize-winning economists have endorsed the proposition adds weight to the argument that a wealth tax is a necessary step to address the growing wealth gap.
The success of Proposition 40 could also have implications for the federal government, which has been debating wealth tax proposals in recent years. The proposition's outcome could influence the national conversation on taxation and income inequality, potentially leading to a shift in policy.
