Nobel Prize-Winning Economists Back First Billionaire Tax in US

Six Nobel Prize-winning economists have signed an open letter supporting what could be the first billionaire wealth tax in the US, if voters approve it this November. 

The economists, including former chief economist of the World Bank, Joseph Stiglitz, say that a one-time 5% tax on billionaire residents of California could kickstart wealth distribution in the US and across the world. 

Tech entrepreneurs based in and around Silicon Valley have spent at least $120m lobbying against the tax, known as Proposition 40, since January. Google co-founder Segrey Brin has donated $102m to an opposition group funding an advertising blitz against the ballot. 

In an open letter published on Saturday, the six economists said the one-off tax could be the first step towards reining in billionaire power. 

“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,” they wrote. 

“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.”

They added that billionaires accounted for only 1% of donations during the 2000 federal election cycle, a figure which had jumped to 19% by 2024. 

Alongside Stiglitz, the letter was signed by MIT professors Peter Diamond, Daron Acemoglu, Abhijeet Banerjee and Esther Duflo as well as City University of New York professor and journalist Paul Krugman. 

California’s billionaires were taxed on only 1.9% of their collective $1.4tn wealth gain between 2019 and 2024 – a percentage far lower than that paid by ordinary Californians. 

The one-off tax, which would raise about $100bn, would offset cuts to Medicaid and food assistance produced by President Trump’s One Big Beautiful Bill Act in 2025. 

Jensen Huang, CEO of the world’s most valuable company, Nvidia, previously told Bloomberg he would be “perfectly fine” with the 5% levy. With a net worth of $159bn, Huang alone could face a tax of $7bn. 

One of the letter’s signatories, Daron Acemoglu, spoke about the dangers of big tech oligopolies on Downstream yesterday with Novara Media’s Aaron Bastani.