Bring world's first billionaire tax, Abhijeet Banerjee, Esther Duflo urge California

California will be voting on November 3 to decide whether to impose a wealth tax on its super-rich, in what could be a first in the United States. The tax plan has received the backing of six Nobel Prize-winning economists, who say the move might trigger a demand for such taxation from other American states and countries across the world.People will be voting on what is called California's Proposition 40, a plan to levy a one-time 5% wealth tax on the state's residents with a net worth of $1 billion or more.California is home to the most number of American billionaires, and to some of the US's most-valued companies, like Google, Apple, Meta and Nvidia.The economists backing the plan in an open letter include, Joseph Stiglitz, Abhijit Banerjee and Esther Duflo, according to a report in The Financial Times and Fortune. Banerjee, an Indian-American economist, and wife Duflo won the 2019 Nobel Prize in Economics along with Michael Kremer, for their "experimental approach to alleviating global poverty".Stiglitz, a former chief economist of the World Bank, won the Nobel in Economics in 2001. The other economists backing the plan include Paul Krugman, Peter Diamond and Daron Acemoglu.They say that the proposed one-time 5% levy on billionaires could kick-start a movement to introduce wealth taxes across America and the world. They say it will be a global first."If it passes, Proposition 40 would be the first-ever tax on billionaire wealth enacted anywhere in the world. California is the right place to take this historic step. The explosive growth of the state's billionaires over the past few decades has made it one of the most unequal places in America," they wrote in the letter released on Saturday.CALIFORNIA'S WEALTHIEST HOLD WEALTH WORTH $2.3 TRILLIONIt is said that the wealthiest 0.001% in California hold $2.3 trillion, up from $750 billion ten years ago. "Their wealth now amounts to the entire annual income of all California taxpayers, some 20 million of them", the six economists wrote in the letter that was shared by the French-American economist Gabriel ZucmanCalifornia has around 250 billionaires with a collective worth of over $2 trillion, according to a September 20 Reuters report. The six warned that this extreme wealth accumulation has enabled the same billionaires to exercise "extraordinary power, inCalifornia, just like in the US more broadly," pointing out to their donations to political campaigns."If the state that houses some of the country's most powerful billionaires votes to tax their wealth, it will kickstart a movement to tax ultra-high-net-worth individuals in other states -- and eventually at the federal level and in other countries," the economists wrote.They presented it as a democracy vs oligarchy battle. "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," the six economists wrote.Some of the billionaires are fighting back. Google co-founder Sergey Brin has given $100 million to the campaign against Proposition 40."I fled socialism with my family in 1979 and know the devastating, oppressive society it created in the Soviet Union. I don't want California to end up in the same place," Brin told the New York Times.The Google co-founder, now 53, came to the US as a child with his family from the erstwhile Soviet Union.The California proposition is planned retrospectively, and will impose the tax since January 1 if passed, so that billionaires cannot escape the net by shifting base. However, a report by the US-based news outlet, Bloomberg Tax, noted that at least half a dozen billionaires had moved out of the state ahead of the January 1 cutoff. The outlet identified them as Google co-founders Sergey Brin and Larry Page, venture capitalist Peter Thiel, auto-finance titan Don Hankey, Uber co-founder Travis Kalanick, and filmmaker Steven Spielberg.CALIFORNIA VOTERS BACK BILLIONAIRE TAX PLANExperts have suggested that a yes vote for Proposition 40 might have a bearing on investments and the super-rich in California.However, California voters might be more inclined towards taxing the billionaires.According to the Reuters report, a UC Berkeley IGS Poll found 48% of likely voters supporting Proposition 40, with 41% opposing it in August. A Public Policy Institute of California poll showed Proposition 40 leading 52% to 46% in September.California's billionaire tax was proposed by one of the state's most-powerful healthcare unions with the aim of raising $100 billion to make up for the federal spending cuts.Leaders of the Democratic Party, which is ruling the state, are divided. While the party as a whole backs Proposition 40, its governor, Gavin Newsom, is opposing it, backing a pan-US wealth tax instead.Newsom plans to run for the presidential election in 2028, and might be worried about campaign funding from Silicon Valley's super-rich.The six Nobel Prize-winning economists have tried to reassure voters that Proposition 40 wouldn't dampen investments coming to California."Contrary to the claims of its opponents, taxing billionaires will not doom Silicon Valley, quite the opposite... Since the beginning of 2026, after the wealth tax initiative was announced, California has attracted 80% of all new venture capital funding in America, up from about 50% before 2025," they wrote in the open letter.The economists said Proposition 40 offered "the first opportunity for the people to start reining in the power of billionaires". California's over 200 billionaires won't be happy and some are fighting back. It's still some weeks to go before the voting, in what could be the world's first tax on the super-rich. And the voting and results will be watched the world over.- EndsPublished By: Shounak SanyalPublished On: Sep 21, 2026 19:09 IST