# Stanford study warns California billionaire tax could backfire

> Economists say the proposed wealth tax would raise far less than promised and cost the state billions in lost income taxes.
- Title: Stanford study warns California billionaire tax could backfire
- Summary: Economists say the proposed wealth tax would raise far less than promised and cost the state billions in lost income taxes. Stanford economists warn…
- Keywords: california, proposition 40, billionaire tax, stanford university, wealth tax, income tax, gavin newsom, tech billionaires, Stanford, study, warns, billionaire
- Source: Fortune — https://fortune.com/2026/10/21/california-billionaire-tax-prop-40-stanford-study-39-billion-loss
- Author: Bilin Lin
- Read time: 2 min
- Topics: california, proposition 40, billionaire tax, stanford university, wealth tax, income tax, gavin newsom, tech billionaires
## California's billionaire tax promise
Supporters of Proposition 40 say it would raise one hundred billion dollars, with ninety percent of proceeds earmarked for health care. The measure is on California's November third ballot.
## How the tax would work
Proposition 40 would impose a one-time five percent tax on the net worth of California's few hundred billionaires who were residents on January first, twenty twenty six.The tax would be due in twenty twenty seven.
## Stanford economists see much less
Benjamin Jaros and Joshua Rauh from Stanford University's Hoover Institution estimate the tax would collect about thirty billion dollars, in a range of twenty eight billion to thirty six billion dollars.
## Billionaires are already leaving
The researchers estimate billionaire departures have already eliminated nearly thirty percent of the proposed tax base. Seven billionaires who publicly moved out account for roughly five hundred forty billion dollars in wealth.
## Who has left California
Peter Thiel and Google cofounders Larry Page and Sergey Brin are among the seven billionaires who have publicly moved out of California, according to the study cited by CBS News.
## The long-term cost to California
Stanford economists estimate billionaire departures could cost California one billion to three point five billion dollars a year in lost income tax revenue.
## Other economists disagree
Economists Jasper Boll, Emmanuel Saez, and Gabriel Zucman argue that even if every billionaire permanently left, it would take roughly twenty five years for accumulated income tax losses to match the proposed one hundred billion…
## A three hundred forty million fight
Tech billionaires have raised more than three hundred forty million dollars to oppose Proposition 40.Sergey Brin is the largest donor with more than one hundred million dollars.
## Governor Newsom opposes the tax
California Governor Gavin Newsom opposes Proposition 40, arguing it could drive wealthy residents and their income tax payments out of the state. He endorsed Proposition 42, a competing measure that would block Proposition 40.
## Voters will decide November third
A recent Citrin Center and Politico poll found forty six percent of likely voters in favor of Proposition 40 and forty three percent opposed.Competing measures could nullify the tax if they receive more yes votes.
## Key takeaway

Stanford economists warn California's proposed billionaire tax could generate only thirty billion dollars instead of one hundred billion, and trigger departures costing the state thirty nine billion dollars in lost income tax revenue.