Nobel economists say California billionaire tax could spread to other states and countries

September 19, 2026 at 10:57 PM2 min

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Six Nobel Prize-winning economists endorsed California's Proposition 40, a one-time 5% wealth tax on residents worth over $1 billion. They argue the measure could start a global trend, even as opponents warn it may harm economic growth and force founders to sell company stakes.

Key Facts

Proposition 40 would impose a one-time tax of 5% on California residents worth more than $1 billion.
The six Nobel laureates endorsing the measure include Daron Acemoglu, Abhijit Banerjee, Peter Diamond, Esther Duflo, Paul Krugman and Joseph Stiglitz.
California's 250 billionaires are collectively worth $2.3 trillion, and their state income taxes amounted to only 1.6% of their $1.4 trillion wealth gain from 2019 to 2025.
The Service Employees International Union-United Healthcare Workers West says the wealth tax could raise $100 billion in revenue.
Google cofounder Sergey Brin contributed over $100 million toward opposing the billionaire tax.

Economists' Endorsement

In a letter published on Saturday, six Nobel Prize-winning economists endorsed California's Proposition 40. The signatories include Daron Acemoglu, Abhijit Banerjee, Peter Diamond, Esther Duflo, Paul Krugman and Joseph Stiglitz. They wrote that California is the right place to take this historic step, citing the explosive growth of the state's billionaires over the past few decades. The economists estimated that California's 250 billionaires are collectively worth $2.3 trillion. They noted that state income taxes paid by billionaires amounted to only 1.6% of their $1.4 trillion wealth gain from 2019 to 2025.

Political and Business Divide

Governor Gavin Newsom opposes Proposition 40, while U.S. Representative Ro Khanna supports it. Khanna has said he does not want illiquid stakes or voting shares to be taxed. Nvidia CEO Jensen Huang said he is perfectly fine with the tax. Google cofounder Sergey Brin contributed over $100 million toward opposing the billionaire tax. Some unions have also come out in opposition, saying other areas of state spending should be priorities.

Economic Impact Debate

Opponents warn the tax could harm economic growth and force founders to sell large stakes in their companies. Supporters say California's ultra-rich would still be among the world's wealthiest even after the tax. The union pushing Prop 40, SEIU-United Healthcare Workers West, says the wealth tax could raise $100 billion in revenue. The Nobel laureates argued the tax will not doom Silicon Valley, noting California attracted 80% of all new venture capital funding in the U.S. since the start of 2026. That share is up from about 50% before 2025, despite fears of the tax surfacing among billionaires in late 2025.