Economists Warn Against California Wealth Tax

What happened

Updated 9:23am ET

More than 100 economists urged California voters to reject Proposition 40, the proposed billionaire wealth tax. California voters are set to decide the measure, a one-time 5% tax on billionaire residents’ wealth that would apply retroactively to residents as of Jan. 1, 2026. The proposal sits inside a fight over taxing the richest Americans, with supporters seeing a model and opponents warning capital could leave. Supporters say the money would mainly fund health care, with some for food aid and education, and could offset federal cuts. The economists argued wealth and investment can move, retroactive taxation may be legally vulnerable, and illiquid assets would be hard to value. Voters were expected to decide Tuesday.

How the left told it

Only one left-leaning outlet we track covered this: The Guardian, under the headline “I’m a wealthy Californian. The billionaire tax is a win for everyone | George Zimmer”.

How the right told it

Right-leaning outlets framed the letter as proof the measure would harm California’s economy, not as a dispute over safety-net funding. The New York Post highlighted economists’ warning that the tax is “already driving the rich out,” cast opposition as bipartisan expertise, and described California’s tech-heavy economy as “neo-feudal”.