Nobel economists throw support behind California billionaire tax

{"text":[[{"start":8.38,"text":"A group of progressive Nobel Prize-winning economists has joined the fray in California’s battle over what would be the first wealth tax in the US if state voters approve the measure in November."}],[{"start":19.36,"text":"Six laureates including Joseph Stiglitz and Peter Diamond have penned an open letter backing the proposed one-time 5 per cent levy on billionaires, saying it could kick-start a movement to introduce wealth taxes across America and the world."}],[{"start":34.22,"text":"The intervention comes after opponents launched attack ads saying the tax would cost California more than it brings in and calling it a Trojan horse for wealth taxes on everyone, foreshadowing what is likely to be one of the most expensive ballot measure fights in the state’s history."}],[{"start":49.88,"text":"Tech entrepreneurs and venture capitalists led by Google co-founder Sergey Brin have poured money into defeating the tax and promoting alternative proposals that would prevent California from imposing wealth taxes in the future."}],[{"start":null,"text":""}],[{"start":63.06,"text":"The vote on November 3 is “the first opportunity for the people to start reining in the power of billionaires”, the economists argue in their letter."}],[{"start":71.58,"text":"“If the state that houses some of the country’s most powerful billionaires votes to tax their wealth, it will kick-start a movement to tax ultra-high-net-worth individuals in other states — and eventually at the federal level and in other countries,” they wrote. “As Californians head to the polls, their vote may well come to be seen as a turning point in the battle between democracy and oligarchy.”"}],[{"start":93.28,"text":"Stiglitz is a former chief economist of the World Bank, and Diamond is an MIT professor who was nominated to the Federal Reserve Board by then president Barack Obama but withdrew after Republican opposition."}],[{"start":105.2,"text":"The letter’s other signatories are: Daron Acemoglu, who won the 2024 Nobel Prize in Economics for work analysing the differences in prosperity between nations; Abhijit Banerjee and Esther Duflo, who won in 2019 for work in development economics; and Paul Krugman, the trade economist turned political commentator."}],[{"start":124.7,"text":"All six have previously expressed support for wealth taxes or higher income taxes on the very rich."}],[{"start":133.34,"text":"“Contrary to the claims of its opponents, taxing billionaires will not doom Silicon Valley, quite the opposite,” they wrote. “Since the beginning of 2026, after the wealth tax initiative was announced, California has attracted 80 per cent of all new venture capital funding in America, up from about 50 per cent before 2025."}],[{"start":152.02,"text":"“What will allow California to thrive in the future is not letting a handful of billionaires live tax-free: it is adequate public spending on health, education and public infrastructure, key engines of economic growth to which it is only fair to ask the ultra-wealthy to contribute.”"}],[{"start":169.04,"text":"The billionaire tax was proposed by one of California’s powerful healthcare unions to raise $100bn to replace cuts to federal spending in the state. It was designed with help from other international economists who have long promoted wealth taxes, including University of California, Berkeley professors Emmanuel Saez and Gabriel Zucman."}],[{"start":189.08,"text":"The proposal has enraged Silicon Valley’s political mega-donors and split the Democratic establishment. The party in California formally backs the tax, but Governor Gavin Newsom, who plans a run for US president in 2028, says wealth taxes should be imposed nationally and this plan will just drive entrepreneurs to other states."}],[{"start":208.52,"text":"Brin financed the campaign group Building a Better California to the tune of more than $100mn and rallied fellow billionaires to contribute to an effort to defeat the tax. The group has funded ads saying it would cost the state $25bn by driving away wealthy taxpayers and sets a dangerous precedent by taxing retirement savings."}],[{"start":228.48,"text":"In another ad, a group sponsored by the California Business Roundtable calls the proposal an “everyone tax” and depicts bureaucrats rampaging through a suburban neighbourhood in search of taxable assets from boats to surfboards to children’s scooters."}],[{"start":243.04,"text":"Recent polling shows the proposal with a slim but narrowing majority. The Public Policy Institute of California found 52 per cent of voters in favour in a poll released on Tuesday, with 46 per cent against."}],[{"start":260.64,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1789859772_1333.mp3"}