Opinion | California’s Wealth Tax and the French Economist

A facts-only brief, written by a local AI model from this article in The Wall Street Journal, October 25, 2026. It may contain mistakes, and it is not the article: the full story is at wsj.com.

An opinion essay argues that the debate over California’s proposed wealth tax reveals dishonesty among its proponents, specifically criticizing French economist Gabriel Zucman for dismissing the likelihood that billionaires will leave the state. The piece contends that Zucman’s position contradicts standard economic modeling, which accounts for behavioral responses to tax policies, and highlights that he has previously suggested an annual wealth tax would be beneficial even if some residents moved. The author asserts that the proposed one-time tax is likely a precursor to permanent increases, citing Zucman’s own statements that the current measure is merely a starting point.

Background

• Prop. 40, appearing on the November 3 ballot, proposes a one-time 5% tax on residents with net worth exceeding $1 billion, with supporters estimating it will raise $100 billion.
• Hoover Institution economists Benjamin Jaros and Joshua Rauh estimate the tax will generate only $30 billion after accounting for court challenges and resident departures, while predicting a $38.9 billion decline in annual income-tax payments.
• Zucman, a leading proponent of the measure, stated on social media that modeling billionaire departure based on the assumption of tax extension is an inappropriate way to model behavior.
• The essay notes that federal Medicaid payments increased by 14% over the last year, and that most budget savings from recent federal reforms will not take effect for several years.

Read the full article at wsj.com

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