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Billionaire tax puts California’s economic future before midterm voters
Fox Business • • nation
Key Points:
- California's Proposition 40 proposes a one-time 5% wealth tax on assets over $1 billion to fund healthcare, education, and food assistance, excluding real property and certain retirement accounts.
- The tax has prompted some billionaires, including Google co-founders Larry Page and Sergey Brin, to leave or relocate businesses, with others like Affirm's Max Levchin considering departure if it passes.
- Supporters estimate the tax could raise about $100 billion over five years with minimal impact on income tax revenue, citing research from UC Berkeley economists who argue billionaires pay relatively low income taxes.
- Contrarily, Hoover Institution economists estimate the tax base has already shrunk by 30% due to departures, projecting revenue between $28 billion and $36 billion, with lost income tax revenue potentially exceeding gains, resulting in a net loss over time.
- The Hoover economists warn the tax may not achieve its fiscal goals and highlight the risk of future wealth taxes since the legislature can amend the measure without voter approval.
