California’s Proposition 40: The Myth of a ‘One-Time’ Wealth Tax

Franco-American economist Gabriel Zucman is one of the principal architects of California’s proposed billionaire wealth tax, a morally reprehensible, economically destructive, and supposedly “one-off” 5 percent levy that, as Proposition 40, will be voted on by Californians in November.

Unsurprisingly, Zucman is unhappy about an analysis of the tax’s likely effect by Hoover Institution economists Joshua Rauh and Benjamin Jaros. Proposition 40’s proponents claim that the tax will raise $100 billion. Rauh and Jaros argue that, far from raising that sum, such a tax would end up costing the state tens of billions of dollars. To put it simply (and before considering other negative consequences), that is because the tax would drive billionaires (and the taxes they pay) out of the state. According to the Wall Street Journal, it is already doing so:

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Andrew Stuttaford

Andrew Stuttaford is the editor of National Review's Capital Matters.

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Franco-American economist Gabriel Zucman is one of the principal architects of California’s proposed billionaire wealth tax, a morally reprehensible, economically destructive, and supposedly “one-off” 5 percent levy that, as Proposition 40, will be voted on by Californians in November.

Unsurprisingly, Zucman is unhappy about an analysis of the tax’s likely effect by Hoover Institution economists Joshua Rauh and Benjamin Jaros. Proposition 40’s proponents claim that the tax will raise $100 billion. Rauh and Jaros argue that, far from raising that sum, such a tax would end up costing the state tens of billions of dollars. To put it simply (and before considering other negative consequences), that is because the tax would drive billionaires (and the taxes they pay) out of the state. According to the Wall Street Journal, it is already doing so: