Former White House Adviser Warns California's Billionaire Tax Could Cost State More Than It Raises
A former U.S. economic adviser has warned that California’s proposed one-time wealth tax on billionaires could backfire by reducing overall state revenue, as wealthy residents may leave or shift investments in response. Tomas Philipson, a former acting chair of the Council of Economic Advisers, argued during an appearance on Fox Business that while Proposition 40 aims to raise funds for healthcare through a one-time 5% tax on billionaires with over $1 billion in assets, it could lead to significant losses from other taxes due to reduced economic activity or migration. He emphasized how wealth creation under capitalism benefits consumers and markets. The debate has drawn attention as the November vote approaches, with mixed public support (48% for, 41% against) according to a recent poll. Prominent figures like Coinbase CEO Brian Armstrong have expressed concerns about relocating from California due to the tax proposal.
Topics: California policy economic impact taxation wealth tax