California Voters Face $100 Billion Bill for State's Billionaires

California voters will decide in November whether to impose a one-time tax that could raise $100 billion from the state's billionaire residents. The measure, known as Proposition 40, proposes a 5% levy on the net worth of every individual in the state with assets exceeding $1 billion. Approximately 200 people currently meet this threshold, including prominent figures such as Oprah Winfrey, Mark Zuckerberg, Kim Kardashian, and George Lucas.

Supporters argue the revenue is necessary to fill a gap left by federal funding reductions. Suzanne Jimenez, a representative for 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 risks collapse while a longer-term funding strategy is developed. The cuts stem from President Donald Trump's recent tax and spending legislation.

Public policy professor Francesco Trebbi at the University of California, Berkeley, stated that this appears to be the first billionaire tax in history. He noted that the measure targets a very extreme percentile of the wealth distribution. California holds the largest economy of any US state and ranks fourth globally, surpassing the economies of India and the United Kingdom. Despite this economic size, 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, is the most prominent opponent. He warns that the tax could drive wealthy residents and their income tax revenue out of the state. Sergey Brin, a Google cofounder, has contributed more than $100 million to a political organization funding ballot measures that could block the proposal. A September poll by the Los Angeles Times and the Berkeley Institute of Governmental Studies found that 45% of likely voters support the measure, 42% oppose it, and 13% remain undecided. A majority vote is required for passage.

If approved, the tax would apply retroactively to anyone worth at least $1 billion who lived in California as of January 1, 2026. At least six billionaires have reportedly already left the state. These include Google cofounders 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.

Mark Zuckerberg, head of Meta, told the company's board last month that he was considering moving his primary residence out of California. Meta agreed to a new stock deal to give him additional shares to cover potential losses; he could owe as much as $12.5 billion if the tax passes. Andy Fang, a cofounder of DoorDash, called the measure "stupid." Conversely, Nvidia chief Jensen Huang told CBS that he does not mind paying taxes and accepts that higher earnings require higher taxes.

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

The top 1% of US households held nearly 32% of wealth in the third quarter of 2025, near the highest level in over three decades. According to the Public Policy Institute of California, 72% of Californians say the gap between rich and poor is widening. Trebbi said the measure is driven by an "anti-elite, anti-system sentiment" and is really about trying to "re-balance the scale a little bit."