California voters face $100 billion wealth tax

California residents will vote in November on a proposal that could require the state's wealthiest individuals to pay billions of dollars in new taxes. Proposition 40 proposes a one-time 5% tax on the net worth of every billionaire residing in the state. The measure is designed to raise $100 billion to offset federal funding cuts to the state's healthcare system. These cuts stem from the national tax and spending bill signed into effect by President Donald Trump. If passed, the tax would apply retroactively to anyone who was worth at least $1 billion and lived in California on January 1, 2026.

The campaign for the measure began as a response to projected deficits in state healthcare. Suzanne Jimenez of the Service Employees International Union-United Healthcare Workers West described the bill as a short-term solution. She warned that without the revenue, the state would face a collapse of its healthcare system while longer-term funding strategies are developed. The tax targets a specific group of just over 200 individuals in California. Notable residents in this group include Oprah Winfrey, Mark Zuckerberg, Kim Kardashian, and George Lucas.

Francesco Trebbi, a public policy professor at the University of California, Berkeley, stated he believes this is the first billionaire tax of its kind in history. He noted that the measure targets an extreme percentile of the wealth distribution. California holds the largest economy of any US state and the fourth largest globally, surpassing the economies of India and the United Kingdom. Despite this economic scale, the state has the largest share of homeless people in the nation and one of the widest wealth gaps.

Governor Gavin Newsom, whose term is ending, has emerged as a prominent opponent of the measure. He has warned that the tax could drive wealthy residents and their income tax revenue out of the state. The Los Angeles Times reported that Google co-founder Sergey Brin has donated more than $100 million to a political organization funding efforts to block the ballot measure. A September poll by the Los Angeles Times and the Berkeley Institute of Governmental Studies found that 45% of likely voters supported the tax, while 42% opposed it. Thirteen percent of voters remained undecided. A simple majority is required for the measure to pass.

Several billionaires have already left the state, with at least six having reportedly relocated. Among those who moved are Google co-founders Larry Page and Sergey Brin, venture capitalist Peter Thiel, former Uber executive Travis Kalanick, and Hankey Group founder Don Hankey. Hankey told Forbes that he moved to Nevada because the proposal made him feel unwelcome, despite the jobs his companies created in the state.

Meta chief Mark Zuckerberg told the company's board last month that he is considering moving his primary residence out of California. Meta, which is headquartered in the state, approved a new stock deal giving Zuckerberg additional shares to offset potential tax liabilities. He could owe as much as $12.5 billion under the proposal. Andy Fang, a co-founder of DoorDash, called the measure stupid. Conversely, Jensen Huang, the chief executive of Nvidia, told CBS that he does not mind paying taxes and is comfortable with the principle that higher earners should pay more.

Senator Bernie Sanders addressed a rally in Los Angeles, stating that billionaires believe they have a God-given right to rule. He predicted that voters would provide a powerful lesson on November 3. Washington state voters are also weighing a similar initiative, a 9.9% tax on income over $1 million per year. Dr. Kristian Niemietz of the Institute of Economic Affairs noted that wealth taxes were once common in Europe but only Spain, Norway, and Switzerland still have them. He described such levies as more trouble than they are worth.

US inequality is near its highest level in over three decades. The top 1% of households held nearly 32% of wealth in the third quarter of 2025. A survey by the Public Policy Institute of California found that 72% of Californians believe the gap between rich and poor is widening. A similar share said the state government should do more to address this issue. Trebbi said the measure is driven by an anti-elite sentiment and is an attempt to re-balance the scale.