Billionaires Fleeing California Could Turn a $30 Billion Tax Windfall Into a $39 Billion Loss, Stanford Economists Warn
22nd October 2026
Fortune, a Voice of the Crust.
Supporters of California’s proposed billionaire tax say it could raise $100 billion, with 90% of the proceeds earmarked for health care. A pair of Stanford economists warn it could instead leave the state $39 billion worse off in today’s dollars.
Proposition 40, on California’s Nov. 3 ballot, would impose a one-time 5% tax on the net worth of the state’s few hundred billionaires who were residents on Jan. 1, 2026. The tax would be due in 2027, and those who choose to spread payments over five years would pay more. Real estate, pensions, and most retirement accounts would generally be excluded.
Benjamin Jaros and Joshua Rauh, economists affiliated with Stanford University’s Hoover Institution, see a much smaller payday. In a working paper published this month by the National Bureau of Economic Research (NBER), they estimate the tax would collect about $30 billion, in a range of $28 billion to $36 billion. That is less than a third of what proponents expect.
Their main explanation is simple: Billionaires can move.
The researchers used Forbes billionaire rankings, real estate reports, and public relocation announcements. From those, they estimate that billionaire departures have already eliminated nearly 30% of the proposed tax base. Seven billionaires who have publicly moved out of California account for roughly $540 billion in wealth, CBS News redported, citing the study. They include Peter Thiel and Google cofounders Larry Page and Sergey Brin. The estimate also discounts what remains of the base for the risk that courts strike the tax down.
The new figure is a sharper downgrade than the authors’ earlier Hoover analysis. That analysis projected about $40 billion in revenue and a $25 billion net loss for the state.