Six Nobel Prize-winning economists have publicly endorsed a California ballot measure that would impose a one-time 5% tax on the assets of billionaires in the state. The measure, Proposition 40, could become a flashpoint in the broader debate over wealth taxes in the United States and beyond.
The signers of a letter released Saturday include Daron Acemoglu, Abhijit Banerjee, Peter Diamond, Esther Duflo, Paul Krugman and Joseph Stiglitz. All six have previously supported wealth taxes or higher taxes on the ultra-wealthy. In the letter, they said California is the right place for such a move, arguing that the rapid growth of billionaire wealth has helped make the state one of the most unequal in America.
The economists estimated that roughly 250 billionaires living in California hold a combined $2.3 trillion in assets. They said those billionaires paid state income taxes equal to just 1.6% of their $1.4 trillion in wealth gains from 2019 to 2025. The letter also noted that the number of billionaires could rise further as more high-profile tech companies move toward public offerings.
The proposed tax would fund health care. The union SEIU-UHW, which is backing the measure, says it would raise $100 billion over five years.
