Billionaires fleeing California's wealth tax could cost the state more than the levy makes, Stanford economists say
Source: Business Insider ·
A Stanford paper says billionaire departures could make California's one-time tax a $38.9 billion long-term loss, despite billions raised upfront.
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A Stanford paper warns that California could lose more in future income taxes than it would raise from a one-time billionaire tax.Stephen Lam/San Francisco Chronicle via Getty ImagesSeveral billionaires have left or plan to leave California over its proposed wealth tax.The departures could mean that the state loses more in the long term than the one-time tax brings in.That's according to a working paper shared by a pair of Stanford economists.Supporters of California’s proposed billionaire tax say it could raise about $100 billion. But a new paper puts the takings closer to $30 billion and warns that the state could ultimately lose money if its richest residents flee.Proposition 40, which goes before voters on November 3, would impose a one-time 5% tax on billionaires who were California residents on January 1, 2026, with their wealth valued at the end of the year. Most of the tax proceeds would go toward healthcare.In a National Bureau of Economic Research working paper released…