Californians to vote on one-time 5% wealth tax for billionaires

California voters will decide in November whether to impose a one-time 5% tax on the net worth of every billionaire living in the state. Proposition 40 targets a group of just over 200 individuals, including Mark Zuckerberg, Oprah Winfrey, Kim Kardashian, and George Lucas. The levy is designed to raise $100 billion to offset federal funding cuts to the state’s healthcare system caused by President Donald Trump’s tax and spending bill.

Suzanne Jimenez, a leader with Service Employees International Union-United Healthcare Workers West, described the measure as a short-term fix. She told the BBC that inaction would lead to a collapse of the healthcare system while longer-term funding solutions are developed. Francesco Trebbi, a public policy professor at the University of California, Berkeley, noted that this appears to be the first billionaire tax targeting such an extreme percentile of wealth distribution.

Governor Gavin Newsom, whose term is ending, opposes the measure, warning it could drive wealthy residents and their income tax revenue out of California. Google cofounder Sergey Brin has donated more than $100 million to a political organization funding ballot measures that could block the tax. A September poll by the Los Angeles Times and the Berkeley Institute of Governmental Studies shows 45% of likely voters in favor, 42% opposed, and 13% undecided. A majority is required for the measure to pass.

If approved, the tax would apply retroactively to anyone with a net worth of at least $1 billion who lived in California as of 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 CEO 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.

Meta CEO Mark Zuckerberg informed his board last month that he is considering moving his primary residence out of California. Meta agreed to a new stock deal giving Zuckerberg additional shares to cover potential losses, with his bill potentially reaching $12.5 billion. DoorDash cofounder Andy Fang called the measure stupid. Conversely, Nvidia chief Jensen Huang told CBS that he does not mind paying taxes and accepts that higher earners should pay more. Senator Bernie Sanders told a Los Angeles rally that billionaires believe they have a God-given right to rule and will learn a powerful lesson on November 3.

Washington state voters are simultaneously weighing a 9.9% income tax on earnings over $1 million annually. Dr. Kristian Niemietz of the Institute of Economic Affairs noted that wealth taxes are rare in Europe today, with only Spain, Norway, and Switzerland retaining them. He described such levies as more trouble than they are worth.

US inequality is near its highest level in over three decades, with the top 1% of households holding nearly 32% of wealth in the third quarter of 2025. The Public Policy Institute of California reports that 72% of Californians believe the gap between rich and poor is widening and that the state government should do more. Trebbi characterized the measure as driven by an anti-elite sentiment aimed at rebalancing the scale.