California Ballot Test on Billionaire Wealth

California voters will decide on November 3 whether to approve a one-time 5% tax on the net worth of billionaires residing in the state. The measure, known as Proposition 40, targets more than 200 individuals, including Oprah Winfrey, Mark Zuckerberg, Kim Kardashian, and George Lucas. If passed, 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.

Supporters argue the levy is necessary to stabilize the state's healthcare system. Suzanne Jimenez of the Service Employees International Union-United Healthcare Workers West described the proposal as a short-term fix. She stated, "If we do nothing, we're going to see a collapse of our healthcare system, while we figure out a longer-term solution to fund our healthcare." The campaign estimates the tax will generate $100 billion, or £75 billion, to offset federal funding cuts resulting from national tax and spending legislation.

Francesco Trebbi, a public policy professor at the University of California, Berkeley, believes this is the first billionaire tax of its kind. He noted that it targets an extreme percentile of the wealth distribution. California holds the largest economy in the United States and ranks fourth globally, surpassing India and the United Kingdom. However, the state also contains the largest share of homeless people in the nation and one of the widest wealth gaps.

Governor Gavin Newsom, whose term is ending, opposes the measure. He warns that the tax could drive wealthy residents and their associated income tax revenue out of the state. Sergey Brin, a co-founder of Google, 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 45% of likely voters in favor, 42% opposed, and 13% undecided. A simple majority is required for the measure to pass.

Several billionaires have already relocated. At least six have reportedly left the state, including Google co-founders Larry Page and Sergey Brin, venture capitalist Peter Thiel, former Uber boss 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 told Meta's board last month that he is considering moving his primary residence outside California. The company, headquartered in the state, agreed to a new stock deal giving Zuckerberg additional shares to cover potential losses. He could owe as much as $12.5 billion if the tax passes. Andy Fang, co-founder of DoorDash, called the measure stupid.

Not all wealthy residents oppose the levy. Nvidia chief Jensen Huang told CBS that he does not mind paying taxes and accepts that higher income requires higher tax payments. Senator Bernie Sanders told a rally in Los Angeles that billionaires believe they have a God-given right to rule. He predicted that voters would teach them a powerful lesson on November 3.

Other jurisdictions are considering similar levies. Washington state voters are weighing a 9.9% tax on income over $1 million annually. Wealth taxes are less common today than in the past, with only Spain, Norway, and Switzerland currently implementing them. Kristian Niemietz of the Institute of Economic Affairs described such levies as more trouble than they are worth.

US inequality remains near its highest level in over three decades. 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 residents believe the gap between rich and poor is widening. A similar share believes the state government should do more to address the disparity. Trebbi said the measure is driven by anti-elite sentiment and aims to re-balance the scale.

The vote will determine whether California imposes a direct financial burden on its highest earners. The outcome will also signal how voters respond to targeted wealth taxation in a state with a large economic footprint and deep social divisions.