The word is once

Five percent, once, on what a billionaire was worth while living in California on January 1, 2026. That is Proposition 40, on tomorrow's ballot, and Planet Money's Greg Rosalsky has the two estimates fighting over it. Gabriel Zucman, Emmanuel Saez and Jasper Boll put the take at about $100 billion. Stanford's Joshua Rauh and Benjamin Jaros say the state comes out $39 billion behind.

That's a $139 billion disagreement, and most of it isn't arithmetic. It's two legal guesses and one behavioral one: whether seven billionaires who moved before the cutoff actually escaped it, how much of the tax survives the courts, and whether more billionaires leave afterward, taking their income-tax payments with them. Judges will settle the first two. The third turns on one word in the measure, and it's the one word the measure can't guarantee. The word is once.

The design is smart. A tax on wealth that already exists, assessed on a date that has already passed, is the one tax nobody can change their behavior to avoid. That's the textbook case for a capital levy: it collects without distorting anything, because the decision it taxes was made before anyone knew it would be taxed. Prop 40 was announced in late October 2025, about two months before the residency date. Anyone who leaves now is leaving after the date that counts.

The same textbook carries the catch. A levy is only free of distortion if people believe it won't happen again. The first one taxes decisions already made. Every one after that taxes decisions people can still change, and they change them in advance.

Which is why the most telling line in the piece isn't either estimate. It's Rosalsky's report of where the measure's best-known academic champion stands:

Zucman's book argues for an annual wealth tax. Rauh's $39 billion loss runs on exactly that expectation: billionaires, he says, will rationally fear this won't be California's last, and his model counts the income tax lost to that fear indefinitely. The measure says once. Its leading economist says not once. The revenue depends on which of them a billionaire believes.

The measure says once. Its leading economist says not once.

Zucman's reply deserves a fair hearing. If Rauh counts the income tax lost to future wealth taxes, he should count the revenue from those taxes too, and leaving that side out tilts the result. As a scoring complaint, that lands. So does the pull of the place. Bay Area companies took three-quarters of U.S. AI funding last year. Jensen Huang says he's fine paying something like $8 billion. Mark Zuckerberg reportedly agreed to stay in California for eight years as part of a deal to pay without giving up control of Meta. Agglomeration is real, and it's the reason the tax might collect anything at all.

But agglomeration explains why people stay through one levy. It says nothing about the property that made this one clean, and that property doesn't survive use. Even with two months' warning, Rauh counts seven departures before the cutoff, Sergey Brin's move to the Nevada side of Lake Tahoe among them. Zucman doubts those moves will hold up legally, and he may be right. The next cutoff won't come with two months' warning, though. It will come with years of it, because Prop 40 will have shown that California voters can tax a residency date in arrears, and no ballot measure can promise that the next ballot won't.

A capital levy is the one tax that works best the first time. Prop 40 asks voters to believe it's also the last, and its best-known champion has already said he hopes it isn't.