This week, a leading figure behind California’s contentious billionaire tax admitted that what is initially proposed as a one-time charge might ultimately become a lasting measure.
Emmanuel Saez, an economics professor, disclosed this possibility during a debate on Tuesday at the University of California, Berkeley. He was debating Arthur Laffer, known as the creator of trickle-down economics.
The proposed tax, backed by the Service Employees International Union–United Healthcare Workers West, aims to impose a single 5% tax on Californians whose assets exceed $1 billion.
Proponents argue that this tax is critical to bridging healthcare funding gaps, which have widened due to last year’s cuts to Medicaid and other federal programs.
Although the measure has not yet officially made it to the November ballot, supporters recently announced they had gathered the necessary signatures for it to qualify.
During the debate, the moderator questioned Saez about the tax’s potential permanence, referencing how taxes in California, introduced as temporary measures following the Great Recession, have often been extended.
The debate’s moderator pressed Saez about the possibility of the levy being more than a one-off, noting that previous California taxes initially deemed temporary after the Great Recession ended up getting extended.
“There’s been discussions of having another proposition to make it permanent,” said the moderator, who asked what would make the billionaire tax different.
Saez responded that the current proposal is focused on an “emergency funding need” for health care.
“It’s going to be an experiment. We see the results, and then we decide whether that experiment works, is promising,” he explained.
“If there is another one, I don’t think it’s going to be a one-time tax. You can’t surprise billionaires more than once.”
If the measure is adopted, the conversation could shift to establishing a permanent billionaire tax at a lower rate that lasts for several years, Saez said. The public will see whether other governments adopt California’s proposal or similar wealth tax initiatives, he added.
“It is true, I’m not there to pretend that it’s one, once, and never again — no wealth tax will ever happen after that one. You can’t commit to that,” he noted.
Laffer argued that billionaires who have already fled the state — including notable tech figures like Google co-founder Sergey Brin — may not return to California after the one-time tax expires over fears the state would do it again.
The proposed tax has sparked an election year fight with campaign ads and competing ballot initiatives. Many Democrats, including Gov. Gavin Newsom, also are against the billionaires tax, arguing it would hurt the state’s economy.
Billionaire gubernatorial candidate Tom Steyer, a Democrat, said at Wednesday night’s debate that he would vote for the proposed one-time tax, but “it doesn’t go far enough.”
