4 California billionaires saw their wealth soar 322% over the past two years — but paid 0.04% a year in state income tax

That said, the four do pay other taxes. Most of their tax bill comes from the corporate taxes their companies pay. Counting those and every other tax, the authors estimate the four paid 19.5% of their economic income from 2019 through 2025. That’s a broad measure of income that includes company profits never paid out to shareholders. By comparison, Americans overall paid 31.4% by the same measure.

How much would Proposition 40 actually raise?

Boll, Saez and Zucman expect the tax to raise about $100 billion. They also argue that California wouldn’t lose much income tax if some billionaires leave. In fact, from 2023 through 2025, the state’s billionaires paid only about $3.2 billion a year in state income tax, roughly 2.4% of California’s income tax revenue.

But two economists at the Hoover Institution, a public policy think tank at Stanford University, came up with a much smaller number. In their own paper, Joshua Rauh and Benjamin Jaros estimate the tax would collect closer to $30 billion. Their estimate is lower because it subtracts billionaires who left the state and allows for the chance that courts strike down all or part of the tax.

What California voters should know

Meanwhile, California voters will also see Propositions 41 and 42, two rival measures funded mainly by Building a Better California, a California political committee whose top backers include Brin. According to the state’s official voter guide, Proposition 40 could pass and still not take effect. If Proposition 41 or 42 also passes with more yes votes, a court could rule that the measures clash. So if you support Proposition 40, voting yes on 41 or 42 could help block it.

If you invest, the same basic rule applies to you. Under IRS rules, a stock in a regular taxable brokerage account isn’t taxed on its gain until you sell. If you’ve held it for more than a year by then, most people pay a federal rate of 15% or less on the profit. Gains on shares held a year or less are taxed at the same income tax rates as your wages.