California’s Billionaire Tax & Global Hot Spots 10/28/26

Gabriel Zucman · Paris School of Economics

California's Prop 40 billionaire tax has a good chance to pass given overwhelming popular support.

Zucman thinks Prop 40 has a good chance to pass because there is overwhelming demand and popular support for taxing billionaires. He argues the support is consistent across California, the US and globally. He concedes that the more than $300 million billionaires have spent against the measure may affect the vote, but he does not think it will change the outcome.

“I think it has a good chance to pass. I think there's overwhelming demand and popular support for taxing billionaires.”at 13:34

Joshua Rauh · Stanford Graduate School of Business / Hoover Institution

Prop 40 will fail; it would lose revenue and drive founders and startups out of California.

Rauh says prediction markets put Prop 40's chance of passing at only about 25 to 30%, and he expects it to fail. He argues the tax will not raise the revenue its backers expect. Net losses in future income tax streams would follow as remaining billionaires leave, and the tax would hurt the economy. When founders leave California and the startup ecosystem is threatened, they take their jobs with them. He thinks voters understand this.

“Prediction markets say it's only got about a 25 or 30% chance of passing it, and that's what I think is gonna happen... When founders leave California, when the startup ecosystem is threatened, they take their jobs with them.”at 14:12

Gabriel Zucman · Paris School of Economics

A California billionaire exodus is not happening; billionaires struggle to change residency before the tax.

Zucman argues the exodus narrative does not hold. Mark Zuckerberg would pay more than $10 billion under the tax and has committed to staying in California for at least eight more years while keeping his voting rights in Meta. Establishing nonresident status is hard: you must change schools, burial plots and everything else. Experts believe no billionaire successfully moved out of California before 1 January 2026, so all would owe the 5% wealth tax. He says the exodus 'doesn't make sense' and would not happen.

“It's very hard to become a nonresident for tax purposes... the best experts of that area of the law... believe that no billionaire was able to successfully move out of California before 01/01/2026, meaning they would all be on the hook for the 5% wealth tax.”at 16:33

Gabriel Zucman · Paris School of Economics

Billionaires pay very little tax because they report little taxable income, so income tax fixes won't solve it.

Zucman says billionaires pay very little because they find ways to report no or very little taxable income. In some years Sergey Brin, Larry Page and Mark Zuckerberg reported no income: they paid themselves no salary, their companies pay no dividends and they do not sell shares. Because of this, changing the income tax rate would not address the core problem, so fixing the income tax alone will not solve it. He also notes the top 500 French wealth holders own wealth equal to 35% of French GDP, and in California 50 billionaires hold wealth equal to 50% of state GDP.

“...but it would not address the fundamental issue, which is that billionaires pay very little. And the problem is that these billionaires, they find ways to report no or very little taxable income.”at 26:16

Joshua Rauh · Stanford Graduate School of Business / Hoover Institution

Claims that billionaires avoid tax via buy-borrow-die and low income are overstated and wrong.

Rauh argues the buy-borrow-die borrowing figures are wildly misstated and drastically overinflated. They include margin lending on stocks for everyone and loans against private businesses. A Yale Law School study shows how minor these strategies are. He also rejects the claim that billionaires don't pay tax, saying it is based on SEC filings about their company shares. Gabriel doesn't have data on family offices or their tax payments, and billionaires realize gains and pay tax when they do. Over their lifetimes they pay tremendous amounts of tax.

“The idea that there are vast amounts of money that are being borrowed to fund consumption have been wildly misstated... Those numbers are drastically overinflated, and there's a great study from Yale Law School about this.”at 27:30

Kurt Volker · Center for European Policy Analysis (CEPA)

After the midterms Trump must choose: accept Iran's Gulf control or push to topple the regime.

Volker says Trump has paused attacks and kept the economic embargo to keep oil prices lower before the midterms. After the midterms he faces a choice. He can leave Iran de facto controlling the Persian Gulf, with the regime and its proxy support intact and growing control over time. Or he can return to war to change that setup, ideally toppling the regime. Volker argues Israel alone will not have much more success against Iran than it has had, so any push depends on combining with the US.

“We have a pause right now. President Trump has decided to keep the economic embargo in place, but ratchet down any attacks in an effort to try to keep oil prices lower before the midterm elections.”at 33:23

Kurt Volker · Center for European Policy Analysis (CEPA)

Israel's government formation will take many months, so no near-term change in Israel.

Volker says there will be little change in Israel in the very short term. Netanyahu's party won fewer seats, and he probably gets the first chance to form a government. Whether he has the coalition votes is unclear, and if he doesn't, the mandate passes to his opponent. He says this 'can go on for many months,' so no changes should be expected in the short term.

“In the very short term, not much change in Israel... This can go on for many months, and so don't expect any changes here in the short term.”at 36:03

Sam Altman · OpenAI

Companies should urgently map the AI-driven security threat; AI systems are finding alarming numbers of vulnerabilities.

Altman says that if he could recommend just one thing to a company now for AI, in the very short term, it would be to understand the security threat landscape from AI and mitigate it. He says he is shocked by how many vulnerabilities AI systems are finding. He thinks getting ahead of this will take a herculean effort. He adds that fixing bugs one by one across the entire supply chain may be too difficult, so new approaches to cyber defense are needed.

“If I could recommend, like, only one thing to a company right now to do with AI in the very short term... it would be to really understand the security threat landscape from AI and mitigate against that. I find myself shocked at just how many vulnerabilities these AI systems are finding.”at 3:25

Joshua Rauh · Stanford Graduate School of Business / Hoover Institution

California has no fiscal emergency; its Medi-Cal spending growth is the problem, not revenue.

Rauh rebuts the claim that California faces a fiscal emergency. Total Medi-Cal funds are up more than double, 123%, since 2019. California spends $219 billion on Medi-Cal from state and federal sources, over $7,000 per resident. Federal Medicaid funds are up 113% and general fund spending is up 79% over seven years. Last year's reconciliation bill only slows the growth of federal funds, and the state's balance sheet holds $75 billion more than in 2019. He concludes that the idea of needing more revenue is flawed and that spending efficiency is the real issue.

“Total funds for Medicaid for California are up more than double, a 123% since 2019... The idea that we need more revenue is just a flawed idea.”at 17:58

Gabriel Zucman · Paris School of Economics

If Prop 40 fails, three million Californians lose Medi-Cal coverage with no plan B.

Zucman argues that if Prop 40 fails, three million Californians will lose health insurance and Medicaid, and there is no plan B. He says even Governor Newsom agrees. He frames the vote as whether about 250 billionaires should pay a 5% tax on their wealth, which he says would bring their wealth back to where it was a few months ago, to keep three million people covered.

“If proposition 40 doesn't pass, three million Californians are going to lose health insurance. They're going to lose Medicaid, and there's no plan b.”at 19:37

Kurt Volker · Center for European Policy Analysis (CEPA)

Far right, not far left, benefits from France's unrest; Le Pen is strongest going into next spring's election.

Volker argues French unrest is driven by a combination of poor university facilities, a labor market where permanent contracts make employers hesitant, so graduates face long stretches of unemployment or underemployment, plus immigration, prices and energy costs. He says the political system feels stagnant and frozen. Although the left is trying to capitalize on this, he expects the unrest to favor the far right, with Marine Le Pen in the strongest position heading into the presidential election next spring, offering a nationalist, Gaullist-style alternative.

“So far, I think you would argue that this unrest is favoring the far right, not the far left, even though the left is trying to capitalize on it. And I think you're gonna see, Marine Le Pen in the strongest position going into that election”at 38:51

Kurt Volker · Center for European Policy Analysis (CEPA)

US easing pressure on Russia by letting it export oil, gas and diesel prolongs the war.

Volker says the current US approach eases pressure on Putin by allowing Russia to export oil and gas and bring diesel into the country, which also gives him political visibility as part of the international community again. He argues this will cause Putin to continue the war, that the war will only end when Putin is stopped, and that the US should do the opposite. He notes Russia is not going well in the fight but is committed, and says Ukraine will keep defending itself.

“And what we are doing right now is easing pressure on Putin, allowing him to export oil and gas, bring diesel into the country, giving him the political visibility of being part of the club again. That's just going to cause him to continue this war. We should be doing the opposite.”at 40:47

Kurt Volker · Center for European Policy Analysis (CEPA)

Trump's push for European defense spending has strengthened NATO, though his Russia strategy is backwards.

Volker says he still firmly believes in NATO and that some things Trump has done have strengthened the alliance, mainly pressure on Europeans to spend more on defense, which he calls good. He separates this from Trump's approach to Russia and Ukraine, which he calls backwards.

“I still believe very firmly in NATO, and there are some things that Trump has done that have strengthened NATO. There's pressure on Europeans to spend more on defense. That has been good.”at 41:44