San Francisco (US): Come November 3, California will be voting on a contentious issue to decide whether the super-rich should be paying a wealth tax.
Citizens will be voting on California’s Proposition 40, a plan to levy a one-time 5% wealth tax on the residents of the American state with a net worth of $1 billion or more.
A group of Nobel Prize-winning economists, including Indian-American Abhijit Banerjee and his wife Esther Duflo, has backed the plan, saying that the move might trigger a demand for such taxation from other American states and countries across the world.
Banerjee and Duflo apart, Joseph Stiglitz, Michael Kremer, Paul Krugman, Peter Diamond and Daron Acemoglu have expressed their views in an open letter, according to a report in The Financial Times and Fortune.
Banerjee, Duflo and Kremer won the 2019 Nobel Prize in Economics 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 accomplished economists pointed out if the proposal is passed, it will be the first billionaire tax in the world.
“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,” the economists wrote in the letter.
According to available figures, 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 seven economists wrote in the letter that was shared by the French-American economist Gabriel Zucman.
Those opposing the wealth tax launched attack ads saying it would cost California more than it brings in, calling it a Trojan horse for wealth taxes on everyone, foreshadowing what is likely to be one of the most expensive ballot measure fights in the state’s history.
