Six Nobel laureates in economics have publicly supported California’s Proposition 40, a ballot measure proposing a one-time 5% tax on the wealth of the state’s billionaires. The initiative, scheduled for a November 3 vote, aims to generate approximately $100 billion in revenue. Proponents argue this amount could offset federal Medicaid cuts.
The economists noted that the wealth of California’s wealthiest 0.001% has grown to $2.3 trillion. They calculated that billionaires paid an effective state income tax rate of 1.6% on their $1.4 trillion wealth increase between 2019 and 2025. The group includes Daron Acemoglu, Abhijit Banerjee, Peter Diamond, Esther Duflo, Paul Krugman, and Joseph Stiglitz.
The measure faces significant opposition from high-net-worth individuals. Chris Larsen, executive chair of Ripple Labs, has contributed $10 million to the Building a Better California PAC and $5 million to the Golden State Promise committee. Ripple Labs provided an additional $5 million to the latter. Larsen’s personal wealth is estimated at $8.4 billion.
Other notable figures are also funding the opposition. Venture capitalist John Doerr donated $7.5 million to the Building a Better California PAC. Sergey Brin has spent $102 million to oppose the tax. The PAC is also supporting Proposition 41 and Proposition 42, which could invalidate the billionaire tax if they receive more votes from the electorate.
