A proposed "wealth tax" on California's billionaires could backfire and cost the state tens of billions of dollars in the long run.

If the proposed tax drives wealthier residents out of the state, California could end up losing between $1 billion and $3.5 billion annually in income taxes, according to a working paper published this week. A pair of researchers at Stanford University warn that the state could end up losing an estimated $39 billion because of the consequences of the wealth tax.

"These findings suggest that the Billionaire Tax Act will not fulfill the primary functions for which it was designed," write researchers Benjamin Jaros and Joshua Rauh.

Voters in California will decide next month whether to impose the one-time, 5 percent tax when they vote on Proposition 40. The ballot measure is dividing Democrats—Gov. Gavin Newsom opposes it, while progressive Rep. Ro Khanna (D–Calif.) claims it is the "most important ballot initiative in America and a fight for the soul of our party."

And it's already spurring some billionaires to flee the state—including venture capitalist Peter Thiel and Google co-founder Larry Page. Including those two, the seven billionaires who have publicly said they are leaving the state represent more than $539 billion of the nearly $1.9 trillion aggregate net worth of California's billionaires, the researchers note.

With other departures likely happening more quietly, the new study estimates that the tax will generate about $30 billion, a far cry from the $100 billion that the tax's supporters expect. The "behavioral response" from billionaires in California "has eroded most of the projected tax base," write Jaros and Rauh.

That's still a pretty big pot of revenue. In the long run, however, the state is likely to lose out.

After running 100,000 simulations using different assumptions, the two researchers report that "85 percent of plausible outcomes produce a negative" result in state revenue.

Other recent experiments with special taxes on wealth have backfired in similar ways. In response to a new wealth tax in Washington State, Jeff Bezos relocated to Florida, and iconic Seattle brand Starbucks shifted more of its corporate headquarters to Tennessee. Studies have shown that a "millionaires tax" in Massachusetts contributed to wealth moving out of that state.

Capital is always mobile, despite the best efforts of politicians. And if you were a billionaire living in California, why would you stick around?

Polls show voters are narrowly divided over Proposition 40. A Politico poll published earlier this month showed 46 percent of voters plan to vote for the measure, while 43 percent oppose it. Voters were similarly divided when asked if they expected it to pass or not.

The post California's 'Wealth Tax' Could Cost the State $39 Billion appeared first on Reason Magazine.

In the first round of Brazil’s elections on Oct. 4, 2026, Flávio Bolsonaro, of the right wing Liberal Party (PL), came in first with 47.03% of the valid votes, compared with 45.16% for the current leftist president and Workers’ Party (PT) candidate, Luiz Inácio Lula da Silva. The margin was just over 2.2 million votes, […]

The post JD Vance-founded, Korea-tied firm now influencing Brazil election appeared first on Asia Times.

With little more than two weeks to go until the midterm elections, it seems increasingly possible that the Democrats, already a big favorite to win control of the House of Representatives, will also take charge of the planet's most elite nursing home, the United States Senate, where the median age is 64 years old. RealClearPolitics' poll aggregator has moved control of "the world's greatest deliberative body" (as its members are grandiosely wont to call it) to "toss up," status and prediction markets are now breaking big toward a blue wave. As of this writing, Kalshi has its Senate odds at 63 percent for the Dems vs. 37 percent for the GOP; Polymarket is at 62 percent vs. 39 percent.

As gratifying as it might be to see unprincipled Trump enablers reduced to minority status after signing off on economy-wrecking tariffs, inhumane immigration detentions, and wars of choice, there's at least one good reason to dread a Democratic majority too: Sen. Elizabeth Warren, the Massachusetts progressive who is spending the run-up to the midterms freaking out over possible consolidation in the condiments business and accusing private equity firms of gutting such shopping-mall favorites as Claire's and Toys R Us. There's every reason to believe that a Senate run by Warren and other economic interventionists will waste time, money, and resources trying to prevent a world in which, per the X wag Iowahawkblog, "a panopticon conglomerate owns two brands of hot sauce."

On October 13, Warren posted this dire warning to X:

Hellmann's mayo
McCormick spices
Cholula hot sauce
Frank's RedHot

What do these products have in common? One company could soon control them all.

I have concerns that McCormick and Unilever's $45 billion merger could increase YOUR grocery prices.

— Elizabeth Warren (@SenWarren) October 13, 2026

It's hard to think of a more competitive and varied market than the one for hot sauces, which is expected to more than double over the next decade. The barriers to entry are generally low, as are the key ingredients, and new entrants can easily market and sell online, avoiding the costs of buying shelf space in conventional supermarkets. Yet Warren is urging regulators at the Department of Justice and the Federal Trade Commission to halt mergers of both product makers like McCormick and Unilever and grocery stores like Kroger and Giant Eagle.

The latter complaint is particularly picayune. Kroger is one of the country's largest supermarket chains, operating around 2,800 stores under its own name as well as Harris Teeter, Ralph's, and others. Giant Eagle operates about 170 stores. This merger is no more the stuff of nightmares than a single company producing both Cholula and Frank's RedHot. If Warren gains more clout from being in the majority, expect her to butt in more and more on such mergers.

Making it harder for businesses to adapt is not a recipe for making goods and services more affordable. But Warren is keen to blame economic creative destruction not on "new forms of industrial organization that capitalist enterprise creates" (as Joseph Schumpeter would have it), but on pure greed. In a TikTok released earlier this month, she shows a poster board with corporate logos from once-thriving companies that she says have been "gutted" by "private equity" firms.

"Here's your local mall," she piously intones. "Now, private equity wants you to believe that Red Lobster went bankrupt because of their endless shrimp….They want you to believe that Claire's went bankrupt because teens stopped shopping at the mall." In Warren's telling, private equity firms magically take over thriving businesses and then strip them bare. The typical pattern is that private equity enters the picture after a business is failing.

Virtually all accounts of the decline of, for example, Red Lobster, note that the chain had been spiraling for several reasons before the private equity firm Golden Gate Capital got involved in 2014. As this CNN article notes, the chain, which started in 1968, had seen drops in sales as customer desires changed. Management compounded the difficulties with a series of bad decisions, including continuing various all-you-can-eat menu specials, before coming out of Chapter 11 bankruptcy last year.

Similarly, it's true that some teens still go to malls and get their ears pierced at Claire's. But anyone who has spent time in retail America over the past few decades knows that malls are no longer the destination that they once were. As CapitalOne Shopping Research documents, "in 1986, there were 25,000 malls, large and small, nationwide." By 2023, that number had shrunk to just 1,200. While some malls are coming back, most are not, and for reasons that have nothing to do with private equity. Online retails plays a role (though a smaller one than usually imagined, with e-commerce accounting for less than 20 percent of all retail sales). But mostly, it's that people today tend to want a different sort of retail environment. Anchor stores—think Macy's and J.C. Penney—are shadows of themselves, and younger people have less unstructured time in which to prowl food courts and arcades.

For politicians like Elizabeth Warren, though, there can be no financial gains or losses that aren't the result of shadowy, conspiratorial forces. If her party takes control of the Senate, her words will carry more weight. But it will be American consumers that ultimately shoulder the burden of an even-more-regulated economy. The market for hot sauces will almost certainly stay spicy, but many other parts will surely suffer.

The post Be Prepared for Elizabeth Warren's Reign of Economic Error appeared first on Reason Magazine.

The Democratic Socialists of America (DSA) candidates running for the House of Representatives and endorsed by NYC Mayor Zohran Mamdani are all but guaranteed to win their general elections this November, but that does not mean the midterm drama is over in New York. In the state's 17th congressional district, which includes the lower Hudson Valley, Democratic challenger Cait Conley, a combat veteran who served on the Biden administration's National Security Council, could unseat incumbent Republican congressman Mike Lawler in one of the most consequential races of the midterms. 

The highly contested purple district voted for former Vice President Kamala Harris in the 2024 election while reelecting Lawler for his second term. Now, Lawler is attempting to win a third term as support for President Donald Trump wanes ahead of the midterms. As of Friday, The Cook Political Report lists the race, which could determine control of the House, as a toss-up. 

If elected, Conley would have far more in common with the "Badass Women" coalition of security state and military veterans than with DSA types (think more Sen. Elissa Slotkin from Michigan than Darializa Avila Chevalier). As Judge Street Journal's Timmy Facciola notes, "Conley's candidacy is testing the viability of a tactful centrism that rebukes left-wing positions like abolishing ICE or restricting weapon shipments to Israel." Lawler is also vying for moderates, pitching himself as "one of the most bipartisan members of Congress" and emphasizing his willingness to break with Trump occasionally while still welcoming Trump's support. 

While Lawler and Conley certainly are not pure MAGA acolytes or DSA members, both have leaned into a tech-critical position, much like that of more radical populists like Lina Khan or Steve Bannon, revealing how pervasive anti-tech sentiment has become in mainstream politics. 

This tech skepticism was on full display during an October 14 debate, when each candidate made the case for why they were the most equipped to regulate AI, insisting that the industry needs guardrails. 

Conley said members of Congress do not want to regulate AI because "they want to look out for their billionaire and trillionaire backers like Elon Musk, who is pouring over $260 million into this midterm election." She then added that Musk backed Lawler in his 2024 race. 

Lawler then accused Conley, who previously consulted for Primer AI, of being "the AI candidate for the AI industry."

While Lawler and Conley disagree on specific data center regulations (Conley supports Democratic Gov. Kathy Hochul's data center moratorium while Lawler supports local zoning control over data centers), neither wants to pitch themselves as an explicitly pro-data center candidate. During the debate, Conley claimed that, "On Mike Lawler's watch there have been five data centers built in Rockland County." Lawler has said that he had no say in the decision to build the data centers, and during the debate, he pointed out that the facilities were built for financial services. Lawler also attempted to attack Conley over data centers, slamming her in an ad for saying "we need data centers." Regardless of the candidates' specific policies on data centers, their attacks on one another demonstrate that cheerleading hyperscale data center development is a political liability. In their district, data center has presumably become a dirty term. 

The candidates' tech-skeptical rhetoric did not end with unchecked data center development. After the debate, Reason asked both candidates about their positions on age-verification laws for social media and AI, since such regulations raise significant privacy and censorship concerns by age-gating the internet. Unsurprisingly, both Lawler, who voted for the controversial KIDS Act, and Conley, who has proposed stricter age verification for AI tools, parroted platitudes about why such online safety regulations are necessary to protect children. 

"We have watched how social media is literally hurting the mental health of children," Conley told Reason. "And when you talk about the power of AI and what that power could do, we have to regulate this." 

Lawler gave a similar response, telling Reason that he respects free speech but that protecting children "is paramount." 

This bipartisan consensus over social media regulation has long been brewing in Congress. The mainstream political conversations about AI and data centers, however, are relatively new this midterm election cycle. And it appears both Lawler and Conley have figured out which way Americans' sentiment toward AI is leaning, and they have waged their campaigns accordingly. 

The post Nobody Wants To Be the Pro-Tech Candidate in This New York Race That Could Flip the House appeared first on Reason Magazine.

TEL AVIV — There is one country on earth where Donald Trump could plausibly win a national election, and he knows it. “I could run for Prime Minister,” he joked in May, claiming 99% approval here. No poll has ever shown that. But the joke landed because it is only half a joke. Thirteen days before […]

The post Welcome to Israel, Trump’s country appeared first on Asia Times.