Nobel Prize‑winning economist Daron Acemoglu has publicly backed California’s proposed billionaire tax, explaining on X why he signed a letter supporting Proposition 40.
The measure, endorsed by six Nobel laureates including Acemoglu, Abhijit Banerjee, Peter Diamond, Esther Duflo, Paul Krugman, and Joseph Stiglitz, would impose a one‑time 5% levy on California billionaires, with most of the revenue directed to healthcare.
Economist: US Tax System Far From Optimal
Acemoglu, who won the Nobel in 2024 for his work on global wealth disparities, argued that while permanent wealth taxes may not be necessary under an ideal system, the U.S. system is far from optimal.
He noted that labor income is taxed more heavily than capital income, enabling billionaires to minimize tax bills by borrowing against stock holdings.
He outlined three justifications for the temporary tax: reversing decades of avoidance, curbing billionaire influence in politics, and paving the way for broader federal reform.
The letter estimates Proposition 40 could raise $100 billion from California’s 250 billionaires, whose combined wealth has tripled in a decade to $2.3 trillion.
The proposal faces fierce opposition from tech billionaires, with Google cofounder Sergey Brin contributing $102 million to a campaign against it. Acemoglu acknowledged imperfections but said the measure “deserves support.”
