California’s one-time billionaire tax may lose money, study finds (opens the source in a new tab)
- California’s proposed Billionaire Tax Act, on the November ballot, would take a one-time 5% of the worldwide wealth of residents worth over $1bn on 1 January 2026.
- Economists Benjamin Jaros and Joshua Rauh estimate it would raise about $30bn ($28–36bn), under a third of an earlier $100bn projection, partly because seven billionaires holding about 28.5% of the base left first.
- Billionaires pay an estimated $3.3–5.8bn a year in state income tax. Counting those lost years, the authors put the net value at −$38.9bn, with 85% of 100,000 simulations negative.
- ~$30bn
- estimated one-time take
- −$38.9bn
- net value to the state, mean estimate
Why it matters A one-time tax pays only if the taxpayers stay; mobile billionaires can turn a windfall into a recurring loss.
Watch next The paper assumes even odds the tax survives court and is not yet peer reviewed; 15% of its simulations still show a gain for the state.
Source:NBER (free to read) ↗