California’s billionaire tax will ‘kickstart a movement’ that spreads to more states, the federal government and other countries, Nobel laureates say

Six Nobel laureates have endorsed California's Proposition 40, a wealth tax targeting billionaires that could mark the beginning of a global trend. The tax, which would levy a 5% levy on assets of those worth over $1 billion, is estimated to raise $100 billion in revenue and help offset federal cuts to health spending. The economists who signed the letter – Daron Acemoglu, Abhijit Banerjee, Peter Diamond, Esther Duflo, Paul Krugman, and Joseph Stiglitz – argue that California's wealthy have amassed $2.3 trillion collectively while paying only 1.6% in state income taxes.

The letter contends that billionaires have benefited immensely from the economy but have not paid their fair share in taxes. Opponents warn that the tax could undermine Silicon Valley's economic growth and startups, but supporters argue that California's ultra-rich remain among the world's wealthiest. The measure has divided the state's political and business leaders, with Governor Gavin Newsom opposing it, while other prominent figures like Nvidia CEO Jensen Huang have expressed support.

While a recent poll shows that 52% of likely voters would support the tax, competing measures that would nullify Prop 40 have also gained majority support.