NOBEL PRIZE WINNING ECONOMISTS ENDORSE PROP 40, THE CALIFORNIA BILLIONAIRE TAX

Full original release

Paul Krugman, Joseph Stiglitz, Daron Acemoglu, Abhijit Banerjee, Esther Duflo, Peter Diamond pen open letter backing Prop 40

SACRAMENTO — Trump’s “Big, Ugly Bill” slashed funding for healthcare in California to pay for more billionaire tax breaks, eliminating healthcare coverage for up to 3.4 million Californians and doubling health insurance premiums for millions more. Clinics across California are closing, hospitals are laying off workers, and life-saving services are being cut. Californians are already seeing their healthcare costs skyrocket, and it’s only getting worse.

Now, in a major new development, world-famous Nobel Laureates in economics have released a powerful new letter endorsing Prop 40, the California Billionaire Tax, to make billionaires finally pay their fair share. Daron Acemoglu and Peter Diamond of MIT, Abhijit Banerjee and Esther Duflo, both of the University of Zurich and MIT, and Paul Krugman of the City University of New York (CUNY) and Joseph Stiglitz of Columbia University, have all signed their names.

In their open letter, the Nobel Laureates set the stage, noting, “[t]en years ago, the wealthiest 0.001% of California residents were worth a combined $700 billion. Today, that same fraction of the population, California’s 250 billionaires, are collectively worth $2.3 trillion. Their wealth now amounts to the entire annual income of all California taxpayers — some 20 million of them.”

Despite this massive influx of wealth, more than 400 hospitals statewide have already laid off more than 3,400 healthcare workers, and a second wave of layoffs is expected as funding cuts from Trump’s “Big, Ugly Bill” hit healthcare providers. Statewide, projections show the cuts could result in the loss of up to 145,000 healthcare jobs, impacting hospitals, clinics, and home care providers. California has already been grappling with a longstanding shortage of health care workers, leaving hospitals and clinics stretched thin even before Trump’s cuts.

Without revenue from Prop 40, these federal healthcare cuts are expected to put an estimated 83 California hospitals and clinics at risk of closure. Cuts and closures have already started, impacting communities from Los Angeles to Oakland to Glenn County.  

In their letter, the economists explain exactly why Prop 40 is needed and what it would do to begin reversing the damage inflicted on California by Trump’s “Big, Ugly Bill,” writing, “First, it would raise a large amount of revenue. A one-time tax of 5% on the wealth of California’s 250 billionaires would raise as much revenue as a 5% income tax on all Californian taxpayers: about $100 billion. The wealth tax would be modest relative to the gains made by billionaires, yet large enough to offset the federal cuts to Medicaid. Nvidia’s CEO Jensen Huang, who would be one of the main taxpayers, put it plainly when he said he would be ‘perfectly fine’ with it.”  

Billionaires already pay much lower tax rates than what working families pay out of every paycheck. They insist on paying less and sticking the middle class with the bill. Prop 40 will enact a tax paid ONLY by Californians worth more than $1 billion, a small group of people who together hold $2 trillion in wealth – most of which may never be taxed due to loopholes that favor the ultra-wealthy. 

Critically, the half dozen Nobel Prize winners refute and dispel the scare tactics that billionaires have been using since the campaign for a billionaire tax first launched, stating plainly, “…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. What will allow California to thrive in the future is not letting a handful of billionaires live tax free: it is adequate public spending on health, education, key engines of economic growth to which it is only fair to ask the ultra-wealthy to contribute.” 

The number of major supporters endorsing Prop 40 far outnumber those opposing it. Just last month, the California State Democratic Party, the California Nurses Association, and the state’s largest labor group, the California Federation of Labor Unions, AFL-CIO, all voted to endorse the Billionaire Tax, showing that Democrats and working families are united behind Prop 40. 

Additional supporters include U.S. Senator Bernie Sanders, Representative Ro Khanna, Representative Judy Chu, Teamsters California, AAFSCME California, the California State Parent Teacher Association (PTA), SEIU-UHW, Committee of Interns and Residents / SEIU, UNITE HERE Local 11, UNITE HERE Local 30, AFT Local 1521, Disability Voices United, Our Revolution California, Oxfam America, Color of Change, the Working Families Party, AFT 1521, and many more. 

“This letter from six of the planet’s most respected economists makes clear that taxing billionaires isn’t harmful to the economy. In fact, it is essential to keeping California’s healthcare economy afloat,” said Debru Carthan, Executive Vice President of SEIU – United Healthcare Workers West.  “Throughout this campaign, we’ve all been subjected to lies from the billionaires – zombie arguments, as Paul Krugman calls them – that a tax on excessive wealth will sink California. Now, Krugman, Stiglitz, Acemoglu, Banerjee, Duflo, and Diamond are telling the world whose side the truth is on.” 

Voters consistently support Prop 40 by large, double-digit margins. A recent poll of likely 2026 California voters found that the billionaire tax holds a strong double-digit, 19-point lead statewide, with voters supporting it by a 57% to 38% margin. Support rises dramatically among constituencies that form the backbone of the Democratic Party, with 80% of Democrats and 70% of union members supporting Prop 40.

Prop 40 qualified for the ballot after supporters submitted more than 1.6 million signatures from Californians across the state — nearly twice the number required to qualify — making it one of the strongest citizen-led ballot qualification efforts in California history.

About Prop 40, the California Billionaire Tax Act

Trump’s “Big, Ugly Bill” slashed funding for healthcare in California to pay for more billionaire tax breaks. These cuts eliminate healthcare coverage for up to 3.4 million Californians and double health insurance premiums for millions more. Prop 40, the California Billionaire Tax Act, will make billionaires finally pay their fair share in taxes to keep local hospitals and ERs open and healthcare affordable for millions of Californians.

Vote YES on Prop 40 to save lives, tax billionaires. 

YESon40.com | Facebook | Instagram | Threads | X | Bluesky | TikTok | YouTube

###