California Ballot to Decide Fate of Billionaire Wealth Tax Proposal

A potential first-of-its-kind tax on the state's richest residents is headed to the ballot box.

Proposition 40, which will be decided by California voters this November, proposes a one-time 5% tax on the net worth of every billionaire residing in the state. The measure would apply retroactively to any individual with assets of at least $1 billion who was living in California on January 1, 2026. Proponents estimate the levy would generate approximately $100 billion to offset reductions in federal funding for the state's healthcare system. The state is home to a population of a little over 200 billionaires.

The proposal arrives amid growing economic inequality. The top 1% of U.S. households controlled nearly 32% of national wealth in the third quarter of 2025, while California ranks high in both homelessness and the wealth gap. Public opinion polling indicates the issue is contentious: a survey released in September found 45% of likely voters in favor, 42% opposed, and 13% undecided. A simple majority is needed for passage. To secure the measure, at least six billionaires have reportedly departed the state, including Google cofounders Larry Page and Sergey Brin, venture capitalist Peter Thiel, former Uber CEO Travis Kalanick, and Hankey Group founder Don Hankey. Meta chief Mark Zuckerberg has also indicated he is considering moving his primary residence elsewhere, though he could face a liability of up to $12.5 billion under the proposal.

Governor Gavin Newsom is a prominent opponent, warning that imposing such a tax could prompt high earners to relocate along with their tax revenue. This concern has been amplified by financial opposition, including Google cofounder Sergey Brin, who has reportedly contributed over $100 million to organizations seeking to block the measure. On the other side, Nvidia chief Jensen Huang has voiced support for the concept, stating he is fine with paying more. Senator Bernie Sanders has endorsed the measure, predicting that on November 3, billionaires will learn 'a very powerful lesson'.

The outcome of Proposition 40 carries significant implications for the state's financial future. Supporters argue that without new revenue, the healthcare system faces a potential collapse due to federal funding cuts. Critics, however, contend that targeting such a specific group could damage the economic climate. The measure would not be unique to the state, as voters in Washington are also considering a 9.9% tax on annual income exceeding $1 million. While such levies were once common in Europe, they are now largely limited to Spain, Norway, and Switzerland, a trend that critics describe as 'more trouble than it is worth'.