Economics Nobel Laureates' Letter Supporting the California Billionaire Tax [pdf]

Posted by marojejian 1 day ago

Comments

Comment by radialstub 1 day ago

The current tax system is fundamentally flawed, and this will achieve nothing.

The system is rigged against people who provide labour, when these people are the ones keeping the system going. Why can companies deduct taxes from operating expenses and investments, yet individuals are taxed on revenue? This means companies can build wealth much easier than individuals. Why is housing, food, education and savings not considered operating expenses?

Comment by 1123581321 1 day ago

Individual tax rates would be set much higher if they were calculated based on personal budget surplus.

The personal tax prep burden would be unbearable without cheating or taking a statutory amount of personal expenses, which is essentially our current situation.

Arguably encouraging people not to save any money would be a moral hazard.

However, I think you’re really just saying you’d like personal taxes to be lowered, yes?

Comment by spwa4 1 day ago

Well, of course it is. Governments (the biggest force in the economy) want power. Let's assume money is power, because to some extent it is. Money is the ability to do things in the real world, which is the building block of power. Governments' money comes largely, in fact overwhelmingly from the rich (income tax of the top 10% is 80% of income tax take-in, those sorts of stats, and goes out mostly to their many (MANY) employees.

And on top of that, the rich can seriously increase what they pay for the government (while still increasing how quickly they become richer, obviously). So they don't come with demands for themselves personally, they come with demands that would increase the country's economy.

So governments have to beg the rich for (80% of their) money.

And employees have to beg the government for money.

So who has the "Ok, we'll pay you more but to enable that you need to X" power in each case?

Comment by kelseyfrog 1 day ago

> The system is rigged against people who provide labour

We live in a capitalist system, not a labourist system. If you're making money off labor, you're playing the wrong strategy, and why?

In capitalism, the only winning move is to play capital. Typically, this means owning capital and finding a way to make it appreciate by way of paying people for their labor and using the difference in value to your advantage.

Comment by snapplebobapple 6 hours ago

Sad to see Daron on the list, he is usually better at thinking than this. Wealth taxes are a bad idea that wont solve the actual problem of market power abuse but will greenlight crappy leftist governments to burn the capital stock making the future poorer.

Comment by marojejian 1 day ago

While the concept of progressive wealth taxation is very important and good, executing on such taxes is very hard.

I'm skeptical this bill is actually a positive step in the overall campaign. That said, I think the more discussion about the concept, the better.

Comment by marcosdumay 1 day ago

Taxing gains on the value of anything used in a contract as collateral is a simple and useful start.

Comment by quickthrowman 1 day ago

That would have wide ranging negative effects on the middle and upper middle classes (and wallstreetbets), consider HELOCs (home equity loan), ag loans using farmland as collateral, and brokerage margin loans.

I’m fine with it provided there’s some sort of minimum level of wealth required to be taxed in this manner. Taxing someone that is using a HELOC to replace their roof on the unrealized equity appreciation would be unfair, and I’m not even a homeowner.

There are better ways to attempt to tax wealth, eliminate the step-up cost basis and asset shielding in trusts and other forms of estate tax avoidance and the issue would correct itself eventually. Unfortunately, politicians in the US will not do this because they need donations from extremely wealthy people who absolutely do not want their estates taxed away. It’s also too easy to hide money in other places, there will always be nations willing to take on tax haven status to reap the benefits. I’m not sure what a practical solution is given the outsized influence of the wealthy all over the world.

Comment by danny_codes 1 day ago

Publicity is good I think. We want the public to understand that very rich people pay less taxes than the average person. I don't think this is commonly understood, because people get caught up on income statistics, which are an incomplete picture of the accumulation of money.

Comment by toomuchtodo 1 day ago

~69% of Gen Z support it. Time to success is a function of the age out rate of the 55+ voting cohort (~2M/year).

> A new CBS/YouGov poll released Sunday found that 69 percent of respondents under 30 favor candidates who support raising taxes on wealthy Americans.

https://thehill.com/homenews/campaign/6096809-gen-z-taxes-we...

https://assets1.cbsnewsstatic.com/hub/cms/prod_cms_alt/file/...

Comment by andsoitis 1 day ago

> ~69% of Gen Z support it.

Then they should vote more.

Gen Z participated much less than the general electorate in the last election. In 2024 Gen Z voter turnout in the presidential election was 47% vs 65% overall turnout.

Comment by toomuchtodo 1 day ago

Democratic Socialists keep winning elections, so I agree that as long as youth turnout remains high and older voters keep aging out (as death is inevitable), we are on course. The grip of the Olds will weaken eventually. Almost twice as many 55+ voters have died since the last presidential election than margin of victory (relevant because older cohorts tilt conservative per Pew Research). Just gotta keep grinding, and hope that this administration has taught young folks to turn out. Maybe they still won’t, we’ll have to observe and report.

Comment by stockresearcher 1 day ago

People have been saying that for decades. You need a better strategy.

My best recommendation is to volunteer for a campaign, preferably a state-wide one (you may need to wait for the next primary season). Keep your eyes and ears open and see if you can come up with an explanation for why so many middle-aged Democratic voters become Republican voters.

Lots of people will give you reasons and say they are 100% true. But you’ll quickly see that they don’t match anything you are seeing and hearing yourself. Lots of people will tell you that those people don’t matter and are better off gone. You’ll also quickly see why that’s not true either.

Good luck

Comment by toomuchtodo 1 day ago

I’ve done my research, and while I admit some areas are a lost cause (red states) due to the electoral college giving those states undemocratic over representation, blue counties are 80% of US economic activity and where people will continue to congregate (and where political efforts should be focused) as the US continues to urbanize.

80% of farmers voted for this, and are going to lose their farms because of it. Hispanics voted for this, and are getting deported because they’re finding out they aren’t white adjacent enough. Older voters who did well under capitalism are happy with centrism because they were lucky and wealthy from their luck of good wages and early exposure to real estate and equities (30% of wealth is held by the 70+ cohort per Apollo Group). They don’t want to rock the boat, and have no incentive to improve the future. You’re not going to win hearts and minds of some cohorts. “Progress occurs one funeral at a time.” —- Planck

My father, a conservative who has lost everything because of repeated poor personal choices and who I financially support says, “what, you want the government to take care of you?” while only having Medicare and Social Security besides my help to carry him from his 70s to death, so I am exceptionally familiar with the cognitive dissonance we’re experiencing at scale. Call a spade a spade and move on.

Tracking the Farm Economy in Crisis - https://news.ycombinator.com/item?id=49581983 - September 2026

Conservatives are dying at higher rates than liberals - https://news.ycombinator.com/item?id=48633921 - June 2026 (14 comments)

Trump’s megabill will hurt the health of his own voters - https://thehill.com/opinion/columnists/juan-williams/5387100... - July 7th, 2025

> “I know a lot of us are hearing from people back home about Medicaid,” McConnell reportedly told his Senate GOP colleagues at a closed-door luncheon. “But they’ll get over it.”

(he’s finally hurting the people who deserve it; his supporters and voters)

https://news.ycombinator.com/item?id=43105986

He's not hurting the people he needs to be hurting - https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...

Comment by stockresearcher 1 day ago

> “Progress occurs one funeral at a time.”

That's science, not politics. Scientists don't abandon all they've ever believed and switch to the opposite. Voters do. Why is that? I'm merely suggesting you get some personal experience so you can begin to understand. "We're going to win, just as soon as enough Republicans die of old age" is for fools and young people.

Comment by toomuchtodo 16 hours ago

I prefer to call it “hope through demographic trajectories and systems,” to each their own.

Comment by SpicyLemonZest 1 day ago

What the linked poll asked is "Would you prefer to vote for a candidate for Congress who supports tax increases on wealthy Americans?". I would say yes to that, even though I don't support this specific California tax proposal, and I don't think that's a terribly uncommon perspective.

Comment by rvz 1 day ago

The desired outcome is that billionaires should pay their "fair share". That's fine, but are the supporters of this sure that this is the best way to do it?

Also, do they know who really is going to eventually pay for this tax? Guess. (It is not most billionaires.)

On top of that, those taxes will require founders to liquidate their holdings and will also affect employees holding the stock as well so it actually hits tech workers harder.

It's bad enough that the large tech companies are now funding AI data centers by selling their own stock. So why would the founders want to tolerate a >$1B-$40B hit to their own net worth for a tax that really is not a one time tax which the threshold of this "wealth tax" will eventually get lowered into the 100M zone?

Comment by avmich 1 day ago

> That's fine, but are the supporters of this sure that this is the best way to do it?

As I understand, this is the best way to do which we have so far. We are welcome to find a better way while we're using this approach.

Comment by lotsofpulp 1 day ago

How is a marginal land value tax not a far, far better way? It’s already taxed, just need to multiply it by a different number.

Comment by matteoraso 1 day ago

This is pointless if the failed Prop 13 amendment doesn't get repealed. Start with the major issues first, and then see if the tax system needs to be changed.

Comment by gustavus 1 day ago

Is this the same California that has spent $30 billion on a high speed rail without laying a track and is expected to finish at a total of $213 billion 31 years after it was approved?

Or the one that spent $24 billion dollars fighting homelessness only to have overall homelessness numbers increase? My point being California could do a lot more to fix their financial situation but cutting their expenses than trying to claw more money from people.

There's a discussion to be had about taxation in this country but I predict no matter how much revenue they make from this "one time 5% tax", they'll blow the whole thing within 3 years for no gain and then start proposing another "1 time tax" again to try and fix their coffers.

After all it doesn't matter how much money you make if you're spending more than you earn, and nothings more permanent than a temporary fix.

Comment by SubmarineClub 1 day ago

Yup, time and time again Democrats have shown that there is no such thing as ‘enough.’ As soon as more money comes in they find new things to spend it on.

Hence, I oppose ALL tax increases.

The income tax when originally introduced only hit the ‘ultra wealthy’ too, and now look where we are. Why on earth would I ever believe that a wealth tax, once instituted, wouldn’t end up impacting me in a decade or so?

Comment by justgoaway 1 day ago

the same losers that have been writing open letters for 20 years promoting disastrous and failed policies.

we need some fresh air, not old cranks.

Comment by cindyllm 1 day ago

[dead]

Comment by readthenotes1 1 day ago

The nice thing about economics is how unreplicable it is due to exogenous circumstances.

It will be interesting to see how many very successful people decide they don't want to supply even more of the tax base.

"Second, the proponents’ 10 percent avoidance assumption is obsolete before signatures have even been submitted. Between the initiatives announcement on October 15, 2025 and the residency snapshot date of January 1, 2026, just six publicly confirmed departures eliminated far more than 10 percent of the base. During this period, nearly 30 percent of California’s wealth tax base left the state, and this only includes the billionaires who publicly announced their departures (see Table 1). "

https://libertylensecon.substack.com/p/california-wealth-tax...

Unlike in New York City, though, billionaires don't contribute that much to a total income tax receipts- a little over 2%, though that is from about 150 households, so anybody moving will have necessarily a significant impact.

https://www.nber.org/papers/w35218

https://www.ntu.org/foundation/detail/leave-if-you-tax-them-...

Comment by 1 day ago

Comment by TacticalCoder 1 day ago

When looking at commie-inspired taxes, people would be wise to take a cold hard look at how well things are going in communist countries, like for example Cuba or North Korea.

Things aren't exactly great in Cuba atm: the idyllic paradise with gigantic paintings of Che Guevara (even if wasn't cuban, he's still revered as a hero by many in Cuba), the romantic hero (a Rolex-wearing killer but somehow the romantic hero of many) to draw inspiration from.

But, believes us, this time this tax is "the best tax we have". This one time this is really it: the communist tax that's going to work. It won't lead to a situation like in NK, it won't bring the desperation that's ongoing in Cuba.

No, this time the commie tax is going to be perfect. The solution we need.

Trust us.

Comment by Moomoomoo309 1 hour ago

Your argument, as I understand it, is "In current communist countries, things are bad, therefore, nothing communism-adjacent or communism-inspired should be attempted or tried.", is that right? I think there's a bit of a logical leap there from their issues to all communism-inspired taxation.

Comment by jmclnx 1 day ago

Money has to come from someplace if you want the US Gov to stop printing money and inflation.

What is hardly mentioned about inflation is the tax cuts for the rich. That increases money supply and forces the Fed to borrow more, or find other ways of raising funds to pay for the government.

So yes, either fix the tax code or enable this wealth tax nation wide, no other choice. One reason people like the 50s was everyone was taxed and most wealth was not in the hands of the few.