Today, Joshua Rauh, Benjamin Jaros, and Gregory Kearney explain the likely damage that the proposed tax on California billionaires’ wealth would do to the Golden State’s economy and finances; Dan Wang speaks with Andrew Roberts about how the West can rekindle ambitious engineering and development projects to remain competitive with China this century; and Markos Kounalakis explains what recent US diplomatic pressure might mean for the Communist regime in Cuba and the beleaguered citizens of that island.
California Policy & Politics
In an op-ed at the California Post, Senior Fellow Joshua Rauh, Research Fellow Benjamin Jaros, and Research Associate Gregory Kearney argue that the proposed California wealth tax on the state’s billionaire residents will have “a net fiscal effect that will leave the state in worse shape.” The authors note that “according to research from our team at Stanford University’s Hoover Institution, the tax would collect less than half of what’s promised — and ultimately lose more money than it brings in.” The essay explains the consequences of capital flight from the state, with many wealthy residents having fled the retroactive tax already. The authors conclude that “in the most likely outcome, California would forfeit more in future income-tax revenue than it would collect from the wealth tax.” Read more here.
Confronting and Competing with China
On the latest episode of Secrets of Statecraft, Distinguished Visiting Fellow Andrew Roberts is joined by Research Fellow Dan Wang, author of the recent bestseller Breakneck, to explore the shifting balance of global power among China, the United States, and Europe. Wang argues that China’s massive manufacturing capacity, rapid electrification, and relentless infrastructure building are giving it a growing edge—even as Western democracies struggle with regulation, litigation, and political gridlock. The conversation ranges from tariffs, engineering education, and the “vetocracy” holding back Western construction to the geopolitics of electric vehicles, AI regulation, and China’s demographic future. Roberts and Wang also discuss the possibility of rising populism in Europe and whether the West can rediscover the ambitious engineering spirit that once built Hoover Dam and the Apollo program. Read more here.
US Foreign Policy
In an essay at Washington Monthly, Visiting Fellow Markos Kounalakis considers the possible outcomes of current US diplomatic and economic pressure on the Cuban Communist government. Kounalakis sees “a convergence of pressures that could finally topple the regime,” writing that currently “it’s grim in Havana.” He suggests that “Rubio’s team hopes to change Havana using the carrot of economic relief and opportunity.” With the loss of oil imports from former ally Venezuela and rolling blackouts underway, Kounalakis says “the Cuban regime’s brittle foundations are visible.” He concludes, “It’s feeling like something is about to break.” Read more here.
US-India Relations
In a new interview at Defining Ideas, Senior Fellow Šumit Ganguly discusses some of the latest challenges faced by the world’s largest democracy, building on the Hoover Institution’s recently released 2026 Survey of India. Like many other nations, India has been whipsawed by changing US rules about tariffs, Ganguly points out, which means fruitful US-India relations remain in a state of suspense. China lurks in the background of US-India negotiations, Ganguly explains, just as China looms over Indian border security in its north. Ganguly also reports that prosperity is becoming visible in India, but not in every part of the country, which leads to worries that inequality might lead to instability. Read more here.
Economic History and USA @ 250
In a post at his Grumpy Economist Substack, Senior Fellow John Cochrane reflects on the legacy and impact of Adam Smith’s The Wealth of Nations and the US Declaration of Independence, both published in 1776. “We celebrate Smith for his foundation of economics as a cause-and-effect discipline,” Cochrane writes. “Want greater national prosperity? Here’s what works: Economic freedom, under the rule of property rights and law, and disciplined by the competition that freedom engenders.” Cochrane argues that America’s “founders shared a similar vision: rather than build a country around the hope that people and especially politicians would act benevolently, in a way they have not done for the last hundred thousand years or so, instead design a political system that channels self-interest to decent public outcome, as Smith points out that a free economic system does.” Read more here.
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