California voters decide on proposed billionaire wealth tax

California voters are deciding Proposition 40 on November 3, a proposed one-time tax of up to 5% on the wealth of some billionaires who were California residents on January 1, 2026. The measure would apply to qualifying individuals and trusts with net worth of at least $1 billion, with the tax calculated using wealth on December 31, 2026. The proposal has prompted sharply different forecasts about its fiscal effects. A California Legislative Analyst’s Office assessment projects a temporary increase of tens of billions of dollars over several years beginning in 2027, while warning that departures could reduce annual income-tax receipts by hundreds of millions of dollars or more. The office said the total revenue is difficult to predict. Economists Joshua Rauh and Benjamin Jaros of the Hoover Institution estimate that the measure could produce a long-term net present-value loss of $38.9 billion after accounting for departures and reduced income-tax receipts. Their analysis estimates California billionaires contribute $3.3 billion to $5.8 billion in state income taxes annually. The estimate is a projection, not a measured outcome. A separate analysis by UC Berkeley economists...