New York Post.
You can usually tell a controversial idea like the “billionaire tax” is bad when proponents start trotting out teams of Nobel Prize winners to defend it.
If the idea really were that good, you wouldn’t need more than one Nobel laureate to make the case. The “tell” is when they quote half a dozen, as if there were a Nobel Prize for groupthink.
Six Nobel Prize-winning economists recently signed a letter urging Californians to pass Proposition 40, the one-time 5% tax on the wealth of the state’s billionaires.
People always forget that the Nobel Prize is awarded by socialists to socialists. When a talking parrot like Paul Krugman can get a Nobel prize, it’s worth is exactly zero.
The letter is wrong about everything, from the history of wealth taxes to the proceeds California can expect the tax to provide.
The letter calls Prop. 40 “the first-ever tax on billionaire wealth enacted anywhere in the world.” Governments have taxed billionaires’ net wealth for decades.
Twelve European countries imposed annual net wealth taxes in the 1990s. They raised very little revenue, cost a lot to administer, pushed investment out of their countries, and were politically unpopular. All but three of the European wealth taxes have been repealed.
Amazing how that works. Less amazing is the amount of lying—or, to be kind, ignorance—that proglodyte proponents marshal to back their Risky Schemes (to quote AlGore).
The letter claims that California billionaires paid income tax equal to just 1.6% of their wealth gains. This is also misleading. 1.6% is not an income-tax rate. It is income taxes paid divided by an increase in estimated asset values, much of it unrealized.
We don’t tax gains on paper. Not for the rich, and not for the middle class. If we did, homeowners would have to pay a tax every year that their home went up in value, even if they were still living in it.
But would you get a payment if your ‘wealth’ went down in value? Of course not. Payments to the government only go in one direction.
The Nobel laureates assert that “it is unlikely any significant number of billionaires successfully cut ties with the Golden State” before the Jan. 1, 2026, effective date of the tax.
But Sergey Brin, Larry Page, Peter Thiel, Don Hankey, Travis Kalanick, Steven Spielberg, and David Sacks all reportedly left before the cutoff. Stanford University economists Joshua Rauh and Benjamin Jaros found that nearly 30% of the expected taxable wealth left California before the measure even qualified for the ballot.
Gee, who could have predicted that?
