20/09/2026
Really great to see this: six Nobel Prize-winning economists (Duflo, Krugman, Diamond, Banerjee, Acemoglu and Stiglitz) just came out in favor of the California billionaire tax.
You don't have to be a radical leftist to see why it's a good idea. First, look at the numbers: ten years ago, the richest 0.001% of Californians were worth $700 billion. Today, that same group (about 250 people) is worth $2.3 trillion.
From 2019 to 2025, their wealth grew by $1.4 trillion. The California income tax they paid over that period was just 1.6% of that gain. A nurse or a plumber pays a higher state tax rate.
Yes, many of these people built great companies, and they've made a lot of money in the process. Good for them! The problem is that wealth on this scale stops being just money. It becomes extraordinary power.
In 2000, billionaires accounted for about 1% of all donations in federal elections. In 2024, it was 19%. The Washington Post, the Wall Street Journal, the LA Times, Facebook, Instagram, TikTok and the platform you're reading this on: all owned and controlled by billionaires.
Now add AI. If you think power is concentrated now, just wait five years. It's going to get much worse.
So, what does Prop 40 actually do? It's a one-time 5% tax on the wealth of California's billionaires. That would raise about $100 billion, enough to offset the federal Medicaid cuts.
"But they'll all leave!" the critics say. Nope, they can't. The tax applies to any billionaire who lived in California on January 1, 2026, and the initiative only became public about five weeks before that.
"But it'll kill Silicon Valley!" Uh no, that won't happen either. Since the tax was announced, California's share of all new US venture capital has gone up, from about 50% to 80%. Nvidia CEO Jensen Huang, who would be one of the biggest payers, said he would be "perfectly fine" with it and had "not even thought about it once".
Sure, some other billionaires can't stop thinking about it. Google co-founder Sergey Brin has already spent more than $100 million to defeat the proposal. At a holiday party in December he pulled Governor Gavin Newson aside and said 'he could not stand the state’s proposed billionaire tax', because he thought the 5% tax would turn California into some kind of Soviet Union.
That is, of course, nonsense. This is not going to be some kind of socialist revolution. The proposal is about restoring balance to a mixed economy. You could even argue it's about saving capitalism itself from oligarchs like Sergey Brin. I think that's exactly why Nobel Prize-winning economists are coming out in favor of this tax.
If Prop 40 passes in November, it will be the first tax aimed specifically at billionaire wealth anywhere in the world. I think it could be the start of a global movement. We're going to need a lot more of this to rebalance the global economy.
Anyway, read the whole letter here. It's really good 👇
https://gabriel-zucman.eu/files/prop40letter.pdf
