Six Nobel Prize-winning economists, including Daron Acemoglu, Paul Krugman and Joseph Stiglitz, have backed California’s Proposition 40, a ballot measure that would impose a one-time tax of up to 5% on the wealth of certain billionaires.
The initiative will go before California voters on Nov. 3. If approved, it would apply to people who were California residents on Jan. 1, 2026 and whose covered assets exceed $1 billion. The measure is expected to raise tens of billions of dollars, with 90% of the proceeds earmarked for healthcare and the remainder for education and food assistance.
In a letter supporting the measure, Acemoglu, Krugman, Stiglitz, Abhijit Banerjee, Peter Diamond and Esther Duflo argued that California could become a test case for wealth taxation in other US states and countries.
How Proposition 40 would work
Under the proposal, the tax would be based on wealth rather than annual income. The official state analysis says the levy would apply to billionaires who were California residents at the start of 2026, with the tax due in 2027. Payments could be spread over five years, although doing so would result in additional costs.
Real estate, pensions and retirement accounts would generally be excluded from the taxable assets. The state’s Legislative Analyst’s Office estimates that the measure could generate tens of billions of dollars over several years, while changes in billionaires’ behaviour could reduce annual state income-tax revenues by less than $1 billion.
The campaign behind the measure, led by the Service Employees International Union–United Healthcare Workers West, has estimated that it could raise around $100 billion.
Billionaires lead campaign against the measure
The proposal has prompted a major campaign from some of California’s wealthiest residents.
Google co-founder Sergey Brin is leading a reported $100 million campaign opposing Proposition 40. Opponents argue that the tax could encourage billionaires to leave California, potentially reducing investment, jobs and future tax revenue.
Governor Gavin Newsom has also opposed the measure, while arguing that wealth taxation should instead be implemented at the federal level.
The opposition includes business groups such as the California Chamber of Commerce and California Business Roundtable. Supporters include Senator Bernie Sanders and the SEIU-UHW.
The campaign has also exposed divisions among California Democrats, with the state Democratic Party supporting the initiative while Newsom has questioned its design.
Support remains closely divided
Recent polling shows Californians are closely divided over Proposition 40, although results vary depending on the survey and how much information respondents have about the measure.
A September poll by the Public Policy Institute of California found that 52% of likely voters said they would vote yes and 46% no after being shown the ballot title and label. Support was 72% among likely Democratic voters, compared with 46% among independents and 21% among Republicans.
An earlier UC Berkeley Institute of Governmental Studies poll found 48% support and 41% opposition among likely voters.
The six Nobel laureates argue in their letter that the proposal would not by itself eliminate inequality, but could provide additional funding for healthcare, education and public infrastructure while changing how the wealthiest residents contribute to public finances.
The measure will be decided by California voters on Nov. 3.
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