California voters will soon decide on a proposed tax targeting billionaire wealth intended to raise funds for the state's healthcare system. Stanford economists however warn that the measure risks producing the opposite result by driving away high-net-worth individuals and ultimately lowering total tax collections.

Seven billionaires have already relocated from California taking roughly 540 billion dollars or about 30 percent of the state's billionaire wealth out of reach according to a new working paper by Stanford researchers Benjamin Jaros and Joshua Rauh. Among those who left are venture capitalist Peter Thiel and Google co-founders Larry Page and Sergey Brin.

Additional quiet departures since the proposal surfaced mean the one-time 5 percent wealth tax may raise only around 30 billion dollars instead of the 100 billion dollars projected by supporters the economists estimate.

While 30 billion dollars remains substantial the researchers calculate that ongoing annual income tax losses from these exits could more than cancel out the initial gain.

The state stands to lose between 1 billion and 3.5 billion dollars each year in income tax revenue the paper projects. When measured in present value terms those permanent shortfalls could exceed the wealth tax proceeds by roughly 39 billion dollars.

The authors conclude that behavioral responses before the vote have already undermined the measure's core revenue goals. The Service Employees International Union-United Healthcare Workers West which sponsored the ballot measure rejected the findings.

Union vice president Debru Carthan stated that the proposition exists solely to make billionaires contribute fairly and avert a healthcare crisis. Carthan added that voters see through what the union calls misinformation efforts.

The tax would offset healthcare spending reductions from recent federal legislation and help millions of residents retain coverage without sharp premium increases Carthan said.

Other economists including Nobel laureates Daron Acemoglu and Joseph Stiglitz have endorsed the measure. They noted that venture funding in California has remained strong since the tax was proposed and argued that public investments in health education and infrastructure drive long-term growth.

A recent Citrin-Politico poll shows voters nearly evenly split with 46 percent in favor and 43 percent opposed. Union leader Dave Regan expressed confidence that the measure known as Proposition 40 will pass describing it as a necessary response to an emergency.