California's Proposed Wealth Tax Breaches the Danger Zone

California’s proposed wealth tax (Proposition 40) has ignited disagreement among economists over its fiscal effect. Jasper Boll, Emmanuel Saez, and Gabriel Zucman that a one-time five percent wealth tax on California billionaires would generate $100 billion in extra revenue. Benjamin Jaros, Joshua D. Rauh, Gregory Kearney, John Doran, and Matheus Cosso, by contrast, that the net present value of the tax would be $24.7 billion, once migration and lost income taxes are properly counted. The gap is not a quarrel about arithmetic. It is a disagreement about behavior: whether California billionaires will willingly bear the levy or leave for more tax-friendly states.   Read Full Article »