Economists Clash Over Revenue Impact of California Billionaire Tax
California's Proposition 40 would impose a one-time 5% wealth tax on billionaires' net worth, applied retroactively to anyone who was a California resident as of January 1, 2026, with proceeds earmarked mostly for low-income health care to offset federal Medicaid cuts. Economist Gabriel Zucman estimates the tax could raise about $100 billion, while Stanford's Joshua Rauh projects it would instead cost the state $39 billion due to billionaire out-migration and lost income tax revenue. Opponents, largely funded by the superrich, have spent $333 million fighting the measure ahead of Election Day. The outcome could set a national precedent for taxing extreme wealth and determine whether states can use such revenue to backfill Medicaid funding gaps.