Even if every California billionaire left tomorrow, it would take 25 years for the state to lose as much as it stands to gain from proposed wealth tax

Main Idea: California’s proposed one-time wealth tax on billionaires could raise far more money than the state would lose if rich residents like Peter Thiel and Larry Page left, according to a new NBER study.

Key Points:

• The ballot measure would levy a 5% tax on about 200 California billionaires, with supporters hoping to raise $100 billion over five years.
• NBER researchers said that even if every California billionaire moved away, it would take 25 years for lost income tax revenue to match the tax’s expected gain.
• The study said billionaire wealth in California has grown much faster than the wealth of ordinary households, while much of that wealth remains untaxed as unrealized gains.
• Critics, including some business and political leaders, warn the tax could push more wealthy people out of the state and face legal challenges if voters approve it.