wealth tax

California's Billionaire Tax Won't Save Hospitals

The state's funding crisis is driven by a third-party payment system in which roughly 90 cents of every American health care dollar is paid by someone other than the patient.

Veronique de Rugy | 3.19.2026 1:15 PM

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I try to be fair to people I disagree with. Emmanuel Saez—the famous UC Berkeley economist who's considered an architect of California's proposed billionaire wealth tax—is someone I read carefully, even when I find his income inequality work unconvincing. So, when I say that his arguments for the wealth tax are not just biased or misleading but egregiously wrong, I'm not being careless. I mean it.

In a recent debate at Stanford University, Saez offered his central justification (apart from, you know, "billionaires are unfairly rich"): California's hospitals need it because the federal government cut Medicaid through last year's One Big Beautiful Bill (OBBB).

As Economic Policy Innovation Center researchers have repeatedly documented, under the Biden administration, Medicaid spending expanded by almost 60 percent, going from roughly $409 billion before the pandemic to $656 billion by 2025. Using the most recent Congressional Budget Office numbers reflecting the OBBB—the supposed instrument of destruction—these researchers now project Medicaid spending to reach $905 billion in 2034. Calling a 38 percent increase........

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