Published June 25, 2026
California’s proposed Billionaire Tax Act would impose a “one-time” 5% tax on the worldwide net worth of individuals with more than $1 billion in assets. Supporters estimate it could raise roughly $100 billion to help address California’s budget pressures, but that projection depends on a static assumption: that billionaires, their assets, and their future income remain in the state.
The evidence suggests otherwise. Once billionaire departures are taken into account, projected revenue falls to roughly $40 billion, before accounting for the loss of regular income-tax revenue from those who leave. The measure would also remove California’s constitutional limit on taxes on intangible property, making future wealth taxes easier to impose. A tax presented as a fiscal solution could instead weaken investment, reduce employment, and erode the revenue base on which the state depends.
Learn more from Joshua D. Rauh:
- Read "The Net Present Value of the Billionaire Tax Act: An Assessment of the Fiscal Effects of California's Proposed Wealth Tax" by Joshua Rauh here.
- Read "Sacramento created California’s budget problem — billionaire tax won’t fix it" by Joshua Rauh here.
- Read "Medi-Cal and One Big Beautiful Bill: Federal Medicaid Reforms and the Fiscal Premise of California's Billionaire Tax Act" by Joshua Rauh here.
Learn more about Joshua D. Rauh here.
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The opinions expressed in this video are those of the authors and do not necessarily reflect the opinions of the Hoover Institution or Stanford University.
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