Stanford Study Warns California Billionaire Wealth Tax May Cut Revenue
A Stanford NBER working paper warns California's proposed Proposition 40 billionaire wealth tax could shrink, rather than raise, public revenue and undermine funding for health care, the study found.[1]
Proposition 40 would impose a one-time 5% state tax on billionaire wealth to fund the health care system.[1] The paper estimates seven publicly known billionaire moves removed about $540 billion, roughly 30% of California's billionaire wealth, from the potential tax base.[1] Authors project the levy could raise about $30 billion, not the $100 billion proponents claim.[1] They warn permanent income tax losses from billionaire departures could outweigh the levy by about $39 billion in present value.[1]
A Citrin-Politico poll shows 46% of likely California voters support Proposition 40 and 43% oppose it ahead of the November 2026 vote.[1] Supporters have pitched the measure as a one-time fix to boost health care funding, while critics warned the tax would prompt wealthy residents and fortunes to leave the state.[1]
The Stanford analysis injects a new economic estimate into a campaign where voter opinion is already closely divided.[1]
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📌 Key Facts
- Proposition 40 would impose a one-time 5% California state tax on billionaire wealth to fund the health care system.
- A Stanford NBER working paper estimates seven publicly known billionaire moves have removed about $540 billion, or 30% of California's billionaire wealth, from the potential tax base.
- The study projects the tax could raise about $30 billion versus the $100 billion claimed by proponents, while permanent income tax losses from billionaire departures could outweigh that by about $39 billion in present value.
- A Citrin-Politico poll shows 46% of likely California voters support Proposition 40 and 43% oppose it ahead of the November 2026 vote.
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