California billionaire tax could leave state with less revenue, Stanford study cautions

October 19, 2026 / 2:16 PM EDT / CBS News

California voters next month will decide on whether to tax billionaire wealth, a proposal designed to generate billions of dollars to shore up the state's healthcare system. But Stanford economists are now cautioning that the tax could backfire, leaving the state with less in tax revenue than before.

Seven billionaires have already publicly moved out of California, removing about $540 billion, or 30%, of the state's total billionaire wealth from potential taxation, according to Stanford University economists Benjamin Jaros and Joshua Rauh in a new working paper published by the National Bureau of Economic Research. The billionaires who have left the state include venture capitalist Peter Thiel and Google co-founders Larry Page and Sergey Brin.

Because additional billionaires have likely quietly moved since the tax proposal was announced, the measure may ultimately generate only about $30 billion, far less than the $100 billion estimated by its proponents, the economists said. If enacted, the tax would apply a one-time 5% state tax on billionaire wealth.

To be sure, $30 billion is still a sizable amount of new tax revenue. But future income tax losses from those billionaire departures could more than…

Original source: https://www.cbsnews.com/moneywatch/