How should lawmakers think about choosing among these options? And is there a particular approach you believe makes most sense for Nebraska?

Sure.

So if you ask an economist completely divorced from any political realities, I think you would generally hear, let's tax absolutely all consumption.

When you look at most states, when you look at what's going to happen, I think that's probably not where most states are going to end up.

But there's a lot of room between where Nebraska is now and taxing absolutely all consumption.

So I put these into three tiers.

The first tier, I don't want to say anything is a light lift.

Before you get to third year, what would you say to someone concerned that expanding the sales tax to gas and to groceries would disproportionately impact low-income families? And are there policy levers that could mitigate that?

So can you kind of make sense of all of those different threads of the economic impact?

Yeah, it's a great question.

And wealth tax rates often do seem low.

Like you said, this one isn't particularly low, but they can be low because they're on a lifetime's worth of accumulated assets rather than on income.

They're on stocks rather than flows.

And of course, the first problem is stocks are often quite illiquid.

If you own a significant share in a private company, Not only would you probably not wish to dispose of this, you don't want to sell your share of the company.

Can California actually administer it? So what does it look like for a realistic, if there is one path for the state to assess value and then actually collect revenues from this tax?

So talk to us about that.

Yeah, that's absolutely right.

I think typically we just sort of visualize it as a bell curve and it's this standard parabola.

And what this new, really interesting study out of the JCT suggests is that, as they put it, the Laffer curve is flat, that over about 20 points of top marginal rate, there's relatively little movement in the actual amount of revenue generated, that you are trading for more progressivity because more of the tax burden is shifting to high income individuals and their after tax income is decreasing because of the higher tax burden, but that the economic consequences are such that you're not raising much, if any, new revenue.

And what it also does is it suggests that it really starts to plateau what I've called this Mesa, because it really does look like a Mesa.

If you go out west and look at these mountains and they just go flat, it really looks like that when they graph it across almost 20 points of rate.

that it starts way earlier than many had previously believed.

Not getting rid of rich people, making rich people less rich.

But then the follow-up is, which maybe is irrelevant to your most recent analysis here, are all those people going to get away?

Yeah, so that is the question and the question that the drafters say, no, absolutely not.

And I think it's a lot more complex than that.

And I think there's a very good chance that they will avoid some, if not all, of their liability if they move this year.

So to your first question.

There are 200 odd billionaires in California.

It's a pretty significant percentage of the national total.

The rest of them have repealed them because they did not work.

Are there any interesting anecdotes sort of like that that you can talk about from other states as they've gone through this process of either doing it or deciding not to do it?

Yeah, most states, especially in recent years, they've cut income taxes, and it's worked for them.

In fact, if you look at the states that have cut income taxes since 2021, their revenues have actually grown faster than states that haven't.

Now, I'm not saying that the income tax paid for themselves, that the cuts paid for themselves.

They did not.

But these were states that had significant growth, expected significant growth, and were able to invest a significant portion of that into rate relief.

And you see the in-migration.

It is among people, right? When you say it's hard to do, are we talking about special interests? Explain that dynamic.

And so what have we seen so far from states responding to these changes? Are they conforming? What's happening to revenue forecasts at the state level because of these changes? Can you walk us through that?

Yeah, absolutely.

So there's some uncertainty in state capitals right now.

Most legislatures aren't in session.

This varies, but most states are only in session a few months out of the year.

So in most cases, they're coming back in January or maybe in February.

So this is very much on everyone's mind.

What did you pay? No clue.