From Fortune · Jason Ma · · 1m 30s
Nobel economists back California's billionaire wealth tax
Six Nobel Prize winners say Prop 40 could spark a global movement to tax the ultra-wealthy.
In brief
Six Nobel Prize winners say Prop 40 could spark a global movement to tax the ultra-wealthy. California's proposed one-time 5% wealth tax on billionaires has backing from leading economists who see it as a potential turning point for taxing extreme wealth globally. Originally reported by Fortune.
Nobel economists endorse California wealth tax
Six Nobel Prize winners including Paul Krugman and Joseph Stiglitz backed Proposition 40, which would impose a one-time 5% tax on residents worth over $1 billion.
“California is the right place to take this historic step.”
California's billionaires avoid taxes on gains
The state's 250 billionaires are worth $2.3 trillion collectively, yet paid only 1.6% of their $1.4 trillion wealth gain from 2019 to 2025 in state income taxes.
Tax could raise $100 billion for health
The Service Employees International Union estimates Prop 40 could generate $100 billion in revenue to offset federal cuts to health spending.
Business leaders split on the measure
Governor Gavin Newsom opposes Prop 40, while Congressman Ro Khanna supports it. Nvidia CEO Jensen Huang backs it, but Google cofounder Sergey Brin donated over $100 million against it.
Economists see global movement ahead
The Nobel laureates predict that if California votes yes, it will inspire similar wealth taxes in other states, the federal government, and other countries.
“If the state that houses some of the country's most powerful billionaires votes to tax their wealth, it will kickstart a movement.”
Voters narrowly divided as election nears
A recent poll shows 52% of likely voters support Prop 40 while 46% oppose it. Two competing measures that would block the tax also have majority support.
The short version
California's proposed one-time 5% wealth tax on billionaires has backing from leading economists who see it as a potential turning point for taxing extreme wealth globally.
