As Californians prepare to vote on Proposition 40 this November — which proposes a one-time 5% wealth tax on residents worth over $1 billion — the debate over wealth inequality is becoming more than just a policy discussion. For many voters, it is about fairness, public trust and whether the wealthiest people should contribute more when inequality continues to shape everyday life.
At this year’s annual Stone Lecture, hosted by the James M. and Cathleen D. Stone Center on Wealth and Income Inequality, Norwegian economist Morten Nyborg Støstad looked at why billionaire taxes remain so popular with voters, and why that support can become more complicated once a proposal reaches the ballot. His lecture, titled “Voter Support for Billionaire Taxes Around the World,” focused on the gap between what people say they support, what economists debate and what actually happens when wealthy individuals are taxed.
“The argument for top billionaire taxes is not just about fairness,” said Støstad, a former UC Berkeley visiting scholar and lecturer and current postdoctoral fellow at the FAIR Institute at the Norwegian School of Economics. “You might also think that inequality or a large wealth concentration at the very top leads to negative societal consequences in other ways. On one side, there's an ethical argument, and then there's another side that is purely a pragmatic argument.”
According to Støstad, taxing accumulated wealth is one of the most popular forms of progressive taxation amongst everyday citizens. He noted that domestic wealth taxes frequently garner 70% or more support in Western countries, including the U.S, and tend to be far more favorable than other progressive mechanisms like top income taxes or inheritance taxes.
Still, he warned that this public support can shift at the polls, as undecided voters are more likely to break toward opposition when facing complex ballot measures they don't fully understand.
This uncertainty, he said, feeds one of the main arguments against billionaire wealth taxes: that the ultra-rich will simply move away, shrinking a state's income tax base and taking businesses with them.
Støstad pushed back on this claim, pointing out that the perceived fear of out-migration often heavily outweighs the reality. He noted that after Norway increased its wealth tax — which sparked about 3,000 news stories predicting a mass departure of the wealthy — only 1.7% of Norway's wealthiest actually left the country, while overall wealth tax revenues rose dramatically.
In the case of California's Proposition 40, he argued that even if some billionaires left the state, California would have to forgo decades of their income tax payments before losing as much money as it would collect from the one-time wealth tax.
“If you take the revenue of the [one-time wealth] tax as $100 billion and [the annual income tax revenue paid by California billionaires] as $3.5 billion, you end up with about 30 years of these income tax payments,” he said. “Even with the most conservative estimates, you still have about 10 years of all income taxes paid by all billionaires to California to be equivalent to the revenue from this one-time wealth tax.”
To further illustrate this point, Støstad concluded by pointing to his recent large-scale research study, which tested global favor for a globally coordinated billionaire tax that would require individuals worth over $1 billion to pay a minimum 2% wealth tax annually. The data, which comprised of results from participants in 40 countries, revealed widespread support for the coordinated tax across geographic lines, political parties and income brackets.
“This analysis of people’s views about billionaire taxation could not come at a better time to help illuminate the public debate following various proposals to tax billionaires around the world, including the California billionaire tax ballot for the November 2026 elections,” said Emmanuel Saez, economics professor and director of the Stone Center. “It also fits perfectly with the mission of the Stone Center on understanding top wealth concentration and what can be done about it in terms of public policy.”
The James M. and Cathleen D. Stone Center on Wealth and Income Inequality is a research hub focused on deepening our understanding of the inequality in society and formulating new approaches to creating a more equitable society.
“The research produced here doesn’t stay in journals. It lives in and shapes our world," Berkeley Social Sciences Acting Dean Laurie Wilkie said, observing the tangible impacts of research emerging from the Stone Center. "Knowledge changes how the world thinks and how governments act. The Stone Center is central to this mission.”