USC and UC Berkeley economists debated Tuesday at USC\u2019s Michelson Hall over whether Proposition 40 would raise billions for healthcare or ultimately cost California tax revenue by driving its wealthiest residents out of the state.<\/p>\n
California Proposition 40 would create a one-time tax on billionaires equal to 5% of their wealth. The tax would apply to billionaires who were California residents as of Jan. 1, 2026, and would be due in 2027. Under the proposition<\/a>, the tax revenue would primarily support medical and other health care services, public education and food assistance programs. <\/p>\n The debate featured Matthew E. Kahn, provost professor of economics and spatial sciences at the USC Dornsife College of Letters, Arts and Sciences, and Emmanuel Saez, the chancellor\u2019s professor of tax policy and public finance at the University of California, Berkeley. <\/p>\n \u201cMy opponents say that if we tax billionaires more, they are going to get upset, leave, and this is going to hurt California\u2019s economy,\u201d Saez said to Annenberg Media.<\/p>\n However, he does not believe these billionaires will leave because California is home to several tech giants. <\/p>\n \u201cThe AI boom we are seeing, and the wealth of billionaires has increased so much, that the tax we are asking them to pay, which is 5% over five years, is just minuscule relative to the enormous wealth gains they can make,\u201d Saez said.<\/p>\n On the contrary, Kahn said to Annenberg Media, \u201cMy opposition is the dangerous precedent that Sacramento gets the sense it can start tapping into the very rich,\u201d said Kahn. \u201cThey\u2019re going to keep raising taxes and coming back to the well. And I worry that ambitious people thinking of moving to California and starting their firms will move elsewhere.\u201d<\/p>\n \u201cWith the money, I\u2019m not convinced this is the best use of the money,\u201d he said. \u201cIf this is really about helping poor people, I\u2019m not convinced this is the best way to help poor people. There are more cost-effective ways to help poor people than these subsidies for Cal Medicaid.\u201d<\/p>\n Students like Cecile Reiner, a sophomore economics major at USC, weighed in on the situation. <\/p>\n \u201cI think it makes sense that the billionaires aren\u2019t paying taxes, and I\u2019m very pro-redistribution,\u201d she said.<\/p>\n Initially, Reiner thought the proposition was very efficient, which is why she supported the bill.<\/p>\n After hearing Kahn\u2019s perspective, Reiner said, \u201cI hadn\u2019t considered how the money would be spent, and I think I\u2019m not a big fan.\u201d <\/p>\n Nick Li, a graduate of USC\u2019s econometrics master\u2019s program who attended the debate, said he\u2019s skeptical of the proposition.<\/p>\n \u201cWhat happens if the government wants to collect some other things from the ordinary people who have lower bargaining power?\u201d Li said. \u201cThe billionaire is actually a shield for ordinary people.\u201d<\/p>\n Polls for California Proposition 40 close at 8 p.m. PDT on Tuesday, Nov. 3. Initial results are expected shortly afterward, though the final count could take several weeks.<\/p>\n Edited by Ally Nakamura<\/a> and Jadon Frank<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"USC and UC Berkeley economists debated Tuesday at USC\u2019s Michelson Hall over whether Proposition 40 would raise billions…\n","protected":false},"author":2,"featured_media":495495,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[17088,48,52,51,47,50,49,192607,173268,167370],"class_list":["post-495494","post","type-post","status-publish","format-standard","has-post-thumbnail","category-los-angeles","tag-emmanuel-saez","tag-la","tag-la-headlines","tag-la-news","tag-los-angeles","tag-los-angeles-headlines","tag-los-angeles-news","tag-matthew-kahn","tag-prop-40","tag-proposition-40"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/495494","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=495494"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/495494\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/495495"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=495494"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=495494"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=495494"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}