Four academics carry California's Prop. 40 billionaire tax against a spending gap of more than 5-to-1
Four academics who drafted California's Prop. 40 are some of its loudest defenders against opponents who outspend them more than 5-to-1. Critics call the one-time billionaire tax a lab test. The vote will say whether California voters want to run it.
The Investor · Invest desk
Key figures: California billionaires' wealth is 25 times what it was in 1982, per Saez's research; Regan sought $100 billion to address federal healthcare cuts; six Nobel prize-winning economists endorsed the measure in the Financial Times.
| Figure | Value | Note | Claim |
|---|---|---|---|
| California billionaires' wealth vs 1982, per Saez | 25 times | 5 | |
| Regan's healthcare target | 100 billion dollars | 2 | |
| Endorsed it in the FT | 6 Nobel economists | 12 |
What happened
- The tax began with a Zoom call in which healthcare union president Dave Regan, seeking $100 billion to offset federal healthcare cuts, asked a group led by Emmanuel Saez about a one-time billionaire tax.
- Regan has since become less visible after workplace misconduct accusations he strenuously denies, leaving Saez, David Gamage, Brian Galle and Darien Shanske to argue the case.
- Gov. Gavin Newsom, Google co-founder Sergey Brin and some labor groups are among the critics.
- Six Nobel prize-winning economists endorsed the measure last month in the Financial Times.
Why it matters
- What doesn't add up contradiction Two healthcare groups, Planned Parenthood Affiliates of California and the California Medical Association, oppose a tax that began as a way to cover federal healthcare cuts.
- What it costs cost Defending the tax has carried personal exposure for the drafters: Gamage said a critic published their photos and contact details, and a flood of angry messages followed.
- What it sets up precedent Wealth taxes have a record of repeal: France, Germany, Denmark, Austria and Luxembourg are among five countries that dropped them. Any state copying Prop. 40 inherits that record.
Saez's pitch is short. Opponents, he said in an interview last month, "hate the fact that the thing is called a billionaire tax because already, that gives us a tremendous advantage" [6]. He calls the simplest argument the best one, that it is time to tax the rich [4], and his evidence is his own research, which found California billionaires' wealth is 25 times what it was in 1982 [5].
The No on 40 campaign answers with a case about where the money goes. It argues the tax will drive away jobs and tax revenue [9], and it built whowroteprop40.org to collect instances in which Saez and Zucman called the tax an "experiment" [8].
The economist who presses that case hardest sits down the hall. Enrico Moretti, Saez's next-door office neighbor in Evans Hall, shares his goal of addressing inequality and opposes the tax [13]. "These billionaires are not going anywhere; they're just going to a different state, and my concern is that they're bringing with themselves a lot of the jobs that could have been in California," Moretti said [14]. "It just strengthens the economy of red states and weakens the economy of the most progressive blue state," he said [15].
The 5-to-1 figure rests on the Sacramento Bee's report, published by CPA Practice Advisor [19]. The report does not include dollar totals for either campaign, the tax rate, the threshold or a revenue estimate, so the gap cannot be checked from it.
We think this is a test case for state-level wealth taxes, or rather half of one. The ballot tests whether a billionaire label can beat a spending gap of more than 5-to-1. The half that matters to any other state, whether billionaires and their payrolls stay, is tested only after a pass.
That leaves three outcomes. If it passes and billionaires stay, Moretti is wrong and other states get a template. Departures after a pass would leave revenue short of the $100 billion Regan first asked for [2]. A defeat leaves the question untested.
This view is wrong if the vote turns on Newsom's opposition or the healthcare groups' and not on the tax itself.
What to watch
- Campaign finance filings with dollar totals for both sides, the only way to check the 5-to-1 spending gap.
- If Prop. 40 passes, data on billionaire residency and California tax receipts. Those figures will settle Moretti's claim about departing jobs.
- Whether the final No on 40 messaging leans on Newsom and the healthcare groups or on the drafters' own word 'experiment'.
Information, not investment advice. This story is general information about companies and markets, drawn from cited reporting. It is not a recommendation to buy, sell or hold any security; check the cited sources before acting.
Clarity's read
What the record supports and how the coverage leans. The claims behind it follow.
Reality
- Evidence40
- Adoption
- Not scored
- Hype gap
- Not scored
- Incentives70
- Confidence50
Claim ledger
Ranked by verification strength, evidence, and original report placement.
- [1]
The one-time wealth tax on billionaires that union president Dave Regan floated is on the California ballot as Proposition 40.
- [2]
Dave Regan, president of a healthcare union, wanted to raise $100 billion to address looming federal healthcare cuts and asked a quartet of academics led by UC Berkeley economist Emmanuel Saez, on a Zoom call, about a one-time wealth tax on billionaires.
- [3]
With Regan less visible in the campaign after accusations of workplace misconduct that he has strenuously denied, drafters Saez, University of Missouri law professor David Gamage, UC Berkeley law professor Brian Galle and UC Davis law professor Darien Shanske are some of Prop. 40's loudest defenders.
- [4]
Saez says Prop. 40's best argument is its simplest: it is time to tax the rich.
- [5]
Saez's research found California billionaires' wealth is 25 times what it was in 1982.
- [6]
"They hate the fact that the thing is called a billionaire tax because already, that gives us a tremendous advantage" Saez said in an interview last month.
- [7]
Gamage said a critic created a website that included photos of the academics as well as their contact information and social media accounts, resulting in a deluge of angry messages; it was later taken down.
- [8]
The No on 40 campaign created the website whowroteprop40.org to draw attention to instances where Saez and UC Berkeley economist Gabriel Zucman characterized the tax as an "experiment."
- [9]
Opponents argue Saez and his allies are conducting a dangerous ivory tower lab test that will drive away jobs and tax revenue.
- [10]
Critics of Prop. 40 include Gov. Gavin Newsom, some labor groups, and billionaires like Google co-founder Sergey Brin.
- [11]
Healthcare groups including Planned Parenthood Affiliates of California and the California Medical Association are among Prop. 40's critics.
- [12]
Six Nobel prize-winning economists endorsed the measure last month, writing in the Financial Times that it marked "a turning point in the battle between democracy and oligarchy."
- [13]
UC Berkeley economist Enrico Moretti, Saez's next-door office neighbor in Evans Hall, shares Saez's goal of addressing inequality but opposes the tax.
- [14]
"These billionaires are not going anywhere; they're just going to a different state, and my concern is that they're bringing with themselves a lot of the jobs that could have been in California," Moretti said.
- [15]
"It just strengthens the economy of red states and weakens the economy of the most progressive blue state," Moretti said.
- [16]
Saez and the other drafters are cramming debates and editorial board meetings in between classroom responsibilities.
- [17]
A wealth tax was falling out of vogue when Gamage highlighted its merits in a 2014 paper; France, Germany, Denmark, Austria and Luxembourg all abandoned the tax over the last several decades.
- [18]
Five countries named in the report abandoned the wealth tax.
- [19]
Prop. 40 supporters are outspent more than 5-to-1 by billionaire-backed critics.
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Sources
1 independent publisher whose own reporting we read for this story.
- cpapracticeadvisor.comWho Designed Prop. 40? Meet the Academics Behind California’s Billionaire Tax Brawl
1 article · October 16, 2026
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Topics
- California Ballot MeasuresFollow
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