Hoover Institution Research Challenges California Billionaire Tax Act Revenue Estimates
The 2026 Billionaire Tax Act has qualified for California's November ballot, sparking a heated debate between competing research papers. Proponents, including economists from the National Bureau of Economic Research (NBER), claim the one-time wealth tax on billionaires' worldwide net worth will generate at least $100 billion in revenue, with 90% allocated to healthcare. However, a Hoover Institution paper authored by Benjamin Jaros, Joshua Rauh, and others disputes this, estimating revenues at about $40 billion (range $35-46 billion) based on 100,000 simulations. The Hoover analysis argues that billionaires will leave the state, causing future income tax losses of $24.7 billion, with 71% of simulations showing a negative net present value. The tax would apply to assets including stocks, private equity, intellectual property, and art, while directly owned real estate is exempt. Governor Gavin Newsom opposes the measure but supports a national wealth tax.
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