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Reagan economist warns billionaire tax would ‘destroy’ California
Fox Business • • nation
Key Points:
- California's Proposition 40 proposes a one-time 5% wealth tax on residents with over $1 billion in assets as of January 1, 2026, excluding real estate, pensions, and retirement accounts, with 90% of revenue earmarked for healthcare.
- Former Reagan economic advisor Art Laffer warns the tax could drive billionaires out of California, making the state less attractive for wealth accumulation and potentially harming its economy.
- The state's Legislative Analyst’s Office estimates the tax could generate tens of billions over several years but acknowledges some billionaires might leave, reducing income-tax revenue by less than $1 billion annually.
- Laffer criticizes the wealth tax as part of a broader, historically unsuccessful effort to tax the rich, linking it to socialist policies and arguing it would ultimately damage California’s economic future.
