California Voters to Decide on One-Time Billionaire Tax

California residents will vote on November 3 to determine whether a one-time 5% tax on the net worth of billionaire residents should be enacted. The measure, known as Proposition 40, targets an estimated 200 individuals whose wealth exceeds one billion dollars. If approved, the levy is projected to raise 100 billion dollars for the state's healthcare system.

Supporters argue the revenue is necessary to offset federal funding cuts resulting from President Donald Trump's recent tax and spending legislation. Suzanne Jimenez of the Service Employees International Union-United Healthcare Workers West described the proposal as a "short-term solution." She warned that without action, the state's healthcare system faces a collapse while longer-term funding strategies are developed.

Francesco Trebbi, a public policy professor at the University of California, Berkeley, stated he believes this is the first billionaire tax in history. He noted that the measure targets an extreme percentile of the wealth distribution. California holds the largest economy in the United States and ranks fourth globally, yet it also has the highest number of homeless people and one of the widest wealth gaps in the nation.

Governor Gavin Newsom, whose term is ending, opposes the measure. He warned that the tax could drive wealthy residents and their associated income tax revenue out of the state. Google cofounder Sergey Brin has contributed more than 100 million dollars to a political organization funding ballot measures intended to block the proposal. A September poll by the Los Angeles Times and the Berkeley Institute of Governmental Studies found 45% of likely voters in favor, 42% opposed, and 13% undecided. A majority is required for passage.

The tax would apply retroactively to anyone worth at least 1 billion dollars who lived in California on January 1, 2026. At least six billionaires have reportedly left the state, including Google cofounders Larry Page and Sergey Brin, venture capitalist Peter Thiel, former Uber boss Travis Kalanick, and Hankey Group founder Don Hankey. Hankey told Forbes he moved to Nevada because the proposal made him feel he was not "wanted" despite the jobs his companies created.

Meta chief Mark Zuckerberg told the company's board last month he is considering moving his primary residence out of California. Meta, headquartered in the state, agreed to a new stock deal giving him more shares to cover potential losses. He could owe as much as 12.5 billion dollars under the measure. DoorDash cofounder Andy Fang called the measure "stupid." In contrast, Nvidia chief Jensen Huang told CBS that he does not mind paying taxes and accepts that higher income warrants higher tax payments.

Senator Bernie Sanders told a Los Angeles rally that billionaires believe they have a "God-given right to rule." He predicted that on November 3, they would learn a "very powerful lesson." Washington state voters are also weighing a 9.9% tax on income over 1 million dollars. Dr Kristian Niemietz of the Institute of Economic Affairs noted that only Spain, Norway, and Switzerland still have wealth taxes, describing such levies as "more trouble than they are worth."

The top 1% of households held nearly 32% of wealth in the third quarter of 2025. According to the Public Policy Institute of California, 72% of Californians say the gap between rich and poor is widening, and a similar share says the state government should do more. Trebbi said the measure is driven by an "anti-elite, anti-system sentiment" and is about trying to "re-balance the scale a little bit."