French economist Gabriel Zucman has renewed his advocacy for a wealth tax in California, supporting Proposition 40, which proposes a one-time 5% tax on the net worth of individuals whose assets exceed $1 billion. Zucman, who previously held a position at the University of California, Berkeley, estimates that the measure could generate approximately $100 billion, with around 90% of the revenue earmarked for healthcare funding.

However, the California Legislative Analyst’s Office offers a more restrained projection, suggesting the tax would likely raise only “tens of billions” of dollars. The office also warned of potential long-term fiscal repercussions, including a decline in income-tax revenue if wealthy residents and entrepreneurs relocate out of the state.

The push for Proposition 40 reflects ongoing debates over how to address public service funding in California amid concerns about healthcare costs. Supporters argue the measure could provide significant resources for public health programs, while critics raise questions about the broader economic impacts and the sustainability of relying on wealth taxes.

Zucman’s approach draws on models from France, where high taxes and extensive social welfare programs have long been central to public policy. France’s government spending accounts for about 58% of its gross domestic product, reflecting a robust social safety net that includes universal healthcare, paid parental leave, and early childhood education.

Despite these social programs, France faces persistent economic and social challenges. Youth unemployment rates among 15- to 24-year-olds have consistently ranged between 17% and 27% over the past two decades, reaching 21.6% in the second quarter of 2026—significantly higher than the 14.8% average in the Eurozone and 9.9% in the United States. Public dissatisfaction is exacerbated by perceptions of inadequate investment in education, defense, and public safety, even as social protection and health spending, which primarily benefit older demographics, have steadily increased.

France’s tax burdens are among the highest in the developed world, with revenue collection exceeding 52% of GDP and government debt approaching 120% of GDP. Critics argue that despite these fiscal efforts, selective underfunding and service shortfalls persist, raising concerns about the long-term viability of funding models that rely heavily on expanding taxation to support growing spending obligations.

In California, proponents of Proposition 40 cite reductions in federal Medicaid growth projections as justification for increased state-level revenue, though federal spending on Medicaid is expected to rise in absolute terms. The Congressional Budget Office forecasts Medicaid funding of $708 billion in 2026, representing an 8% increase from the previous year. Changes in federal eligibility and financing have moderated growth relative to earlier expectations, prompting calls for state governments to compensate for the difference.

Observers highlight that this pattern—where anticipated program expansions lead to ongoing revenue demands, and any moderation in growth is perceived as a funding cut—can contribute to fiscal pressures and the continual search for new revenue sources, such as wealth taxes.

The experience of France offers a cautionary perspective: despite generous social programs and high taxes, fiscal challenges and public discontent remain, underscoring the complexity of designing sustainable tax and spending policies. As California considers its options, some experts advise weighing the long-term implications of relying on wealth taxes as a primary response to funding shortages in public services like healthcare.