Let’s be clear: this is a highly inappropriate way to model the effect of Prop 40 on taxpayer behavior. For one, it’s a basic violation of rational expectations, a cornerstone of modern economics. In Jaros and @joshrauh world, the billionaires act irrationally: they respond to a policy that does not exist and will never exist. Economics students around the world are taught this is not an appropriate way to model behavior — but apparently in this context (fighting Prop 40) it’s OK.