Today, a new paper from Hoover scholars suggests California’s proposed 2026 Billionaire Tax Act will face serious legal challenges if approved by voters in November. California Decides evaluates a ballot measure that would set up a fast lane for select California building projects, and the GoodFellows welcome Michael Auslin to talk about the Declaration of Independence and whether “the spirit of ’76” continues to be felt today.
California Decides
California’s proposed 2026 Billionaire Tax Act (BTA) will face serious legal challenges if approved by voters in November, a new essay from Hoover Institution scholars contends, because it exceeds the limits of California’s taxation powers under multiple provisions of the US Constitution. The measure, which appears before voters as Proposition 40, would impose a 5% tax on the assets of the state’s billionaires. Supporters describe it as a way to raise revenue from California’s richest residents. The paper’s authors focus on whether the tax can survive constitutional scrutiny. In the new paper, Senior Fellow Joshua D. Rauh, Aharon J. Friedman, a visiting scholar at Hoover, and Research Fellow Benjamin Jaros argue that the new measure, if passed, would run against a number of long-established principles under the US Constitution. Read more here.
At California Decides, Hoover explores the pros and cons of Proposition 45, which would carve a new fast-track lane through the California Environmental Quality Act for what it defines as “essential projects.” In the latest Proposition Lab guide, scholars explore the proposal’s merits and ask voters to consider “whether faster building is worth a lighter environmental and public review and whether to trust that the broad definition of ‘essential’” contained in the law will not be abused. Read more here.
US History
It’s remarkable that the Declaration of Independence endures to this day—given that the Continental Congress struggled to help George Washington wage war and a few Founding Fathers didn’t want to be in Philadelphia that summer (beginning with Thomas Jefferson). But does the America of today—a republic featuring a vast federal government, overseen by career politicians—embody “the spirit of ’76” and the late-18th century’s push for liberty? Distinguished Research Fellow Michael R. Auslin joins the GoodFellows to reflect on America’s founding and the special details on the Declaration contained in his new book. After that: the fellows address the possibility of a disruptive “October surprise” in advance of America’s November election and whether such a shock may come in the form of a terrorist event (would it make political sense for Iran to try to embarrass an already struggling President Trump?) or a financial crisis. Watch the episode here.
Freedom Frequency
In this week’s Grumpy Economist Weekly Rant, Senior Fellow John H. Cochrane argues that debates over progressive taxation often blur two different questions: how government should raise revenue and how it should support lower-income households. We should not ask the tax code to accomplish both, he says, making the case for looking at taxes, spending, transfers, and social programs together. Cochrane argues that even a simple consumption tax can be made progressive, while support for lower-income households can be delivered more transparently through direct spending and social programs. But those policies still involve trade-offs: higher marginal tax rates and benefit phaseouts can reduce incentives to earn more. His broader proposal is a simpler tax system that raises revenue efficiently while making those costs more visible. Read more here.
Supporting the Next Generation of Leaders
After 10 years, nearly 1,000 students have now engaged up close with the field-leading scholars of the Hoover Institution through its Summer Policy Boot Camp (HISPBC). Directed by Senior Fellows Scott W. Atlas and Joshua D. Rauh, the program gives undergraduate students and early-career professionals an immersive, close look at US and international policy, teaching students to think critically and evaluate public policy through a dispassionate, evaluative lens. Each participant in the program gets a unique preparation for their future irrespective of career choice, whether that be in public service, business, technology, or the academy. Having this foundational knowledge is important to being a citizen leader. During a panel marking the 10th anniversary of HISPBC, Christopher Phillips, who completed the program in 2023 and rejoined it as a teaching assistant, said the breadth of knowledge and expertise on offer at the program broadened his own horizons. “I found it to be a world-class lineup of faculty and fellows. I learned so much at every single talk that I didn’t know before,” he said. “There were things I hadn’t even ventured into at all.” Read more here.
The Economy
On the latest episode of Economics, Applied, Senior Fellow Steven J. Davis welcomes Harvard’s Wenxin Du to discuss her analysis of how to transfer funds across international borders with cost-effectiveness. Perhaps surprisingly, the all-in costs of using stablecoins for small-amount transfers (less than $10,000) greatly exceed the cost of using fintech apps and sometimes exceed the cost of relying on commercial banks. Along the way, Wenxin’s analysis also highlights the consumer benefits of greater competition in the market for remittances and other cross-border payments.
Get the Story: The high cost and complexity of international money transfers stands in the way of small-scale international trade, hampers migrants supporting families in their home countries, and acts as a drag on global growth. Watch their conversation here.
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