California's billionaire tax could 'kickstart a movement' that spreads to more states and countries

Key Points:

• A group of prominent economists, including Nobel laureates, have endorsed California’s Proposition 40, which proposes a one-time 5% tax on residents with assets over $1 billion to address wealth inequality in the state.
• The economists highlighted that California’s 250 billionaires are worth $2.3 trillion but paid only 1.6% in state income taxes on their wealth gains from 2019 to 2025, and argue the tax could generate $100 billion in revenue to offset federal health spending cuts.
• The measure has divided political and business leaders, with Governor Gavin Newsom opposing it and U.S. Rep. Ro Khanna supporting it, while some unions and tech figures are split, reflecting concerns about economic impact and startup growth.
• Critics warn the tax could hurt economic growth, force founders to sell company stakes, and may not remain a one-time levy, but supporters believe it could spark broader wealth tax initiatives nationally and internationally.
• Polls show Californians are narrowly divided on Prop 40, with 52% support, but competing measures aiming to limit or block new taxes also lead in polls, making the November vote outcome uncertain.