Brian D. Galle (UC Berkeley), David Gamage (Missouri), & Darien Shanske (UC Davis), Correcting the Record: Responding to Some Legal Arguments About the 2026 Billionaire Tax Act (Dec. 31, 2025, revised Jan. 9, 2026), available at SSRN

If adopted by California voters in November of 2026, the 2026 California Billionaire Tax Act (CBTA) would impose a one-time 5% tax on the net worth of California billionaires, payable in five annual installments of 1% over 5 years (plus a small deferral charge). Critics have raised several arguments suggesting that the Act would not bring in the expected $100 billion in projected revenues because, the critics say, key parts of the Act are unconstitutional and would be subject to legal challenge. In fact, the supposed new legal challenges critics identify are mostly just very old arguments that courts have rejected over and over, and in some cases have been rejecting for more than one hundred years.

This short memo was revised on January 9, 2026.  The original version of this memo responded to arguments made by attorney Alex Spiro.  This updated letter responds to other arguments, including those made by the law firm Baker Botts.