California's $100bn Billionaire Tax Goes to Voters

By Nathan Brooks

California voters will decide on November 3 whether to impose what a Berkeley professor calls the world's first dedicated billionaire tax — a one-time 5% levy on the net worth of the state's 200-plus billionaires, designed to raise $100bn (£75bn) for healthcare.

Proposition 40 would apply retroactively to anyone worth at least $1bn who resided in California as of 1 January 2026. The money is meant to backfill federal funding cuts to the state's health system under President Donald Trump's tax and spending bill.

"I believe this is the first billionaire tax — meaning a wealth tax that is targeting a very extreme percentile of the wealth distribution," says Francesco Trebbi, a public policy professor at the University of California, Berkeley.

The vote puts the state's most famous residents — Oprah Winfrey, Mark Zuckerberg, Kim Kardashian, George Lucas — at the center of a debate over inequality in the world's fourth-largest economy, one bigger than India's or the UK's. California also has the nation's largest share of homeless people and one of its widest wealth gaps.

What does this change for the state's finances?

Supporters frame the tax as a stopgap, not a permanent fix.

"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," Suzanne Jimenez, chief of staff for Service Employees International Union-United Healthcare Workers West, told the BBC. Her union helped lead the initiative.

The polling picture is tight. A September survey by the Berkeley Institute of Governmental Studies and the Los Angeles Times found 45% of likely voters in favor, 42% opposed and 13% undecided. Passage requires a simple majority.

Who's backing it — and who's running?

Opposition cuts across party lines. Governor Gavin Newsom worries the wealthy will leave and take their income tax revenue with them. Google co-founder Sergey Brin has given more than $100m to a political organization funding ballot measures that could block the tax, the Los Angeles Times reports.

At least six billionaires have already left California ahead of the January 2026 deadline, reportedly including Brin, fellow Google co-founder Larry Page, venture capitalist Peter Thiel, former Uber CEO Travis Kalanick and Don Hankey of Hankey Group.

"I think we've created a lot of jobs in California. We have a few thousand people working for us and we have a profit sharing plan. And I have to leave the state," Hankey told Forbes, saying the measure made him feel like he wasn't "wanted". He has moved to Nevada.

Zuckerberg, whose wealth is estimated above $200bn, told Meta's board last month he was considering moving his primary residence. Instead, Meta struck a new stock deal giving him additional shares to offset losses if the measure passes — by some estimates he could owe as much as $12.5bn.

DoorDash co-founder Andy Fang, worth an estimated $1.6bn, called the measure "stupid" and wrote on X that "proposals like this make it irresponsible for me not to plan leaving the state".

Yet some billionaires support it. Nvidia CEO Jensen Huang told CBS: "I don't mind paying taxes. The more you make, the more taxes you pay. I'm okay with that." Tom Steyer, who ran unsuccessfully for governor this year, called the drafting "problematic" but said the tax was necessary to protect vulnerable Californians. Senator Bernie Sanders campaigned for Prop 40 at a Los Angeles rally, saying billionaires "believe, like the monarchs of the 19th Century, that they have a God-given right to rule".

What does the global evidence say?

Wealth taxes now survive in only three European countries — Spain, Norway and Switzerland — after falling out of favor across the continent.

Dr Kristian Niemietz, head of political economy at the Institute of Economic Affairs, argues they are "more trouble than they are worth": administratively messy, investment-suppressing, prone to capital flight, and ultimately thin on revenue. A local report found Norway's wealth tax increase drove more super-rich departures in 2022 than in the preceding 13 years combined. A Swiss study found a 0.1 percentage point wealth tax increase reduced taxable wealth by 3.5%.

Voters in Washington State face a parallel choice: a 9.9% tax on income over $1m a year.

The backdrop is record inequality. The top 1% of US households held nearly 32% of national wealth in the third quarter of 2025, and 72% of Californians told the Public Policy Institute of California the rich-poor gap is widening. Trebbi calls Prop 40 a product of "anti-elite, anti-system sentiment" — less about the tax itself than an attempt to "re-balance the scale a little bit".

If it passes, expect immediate legal challenges and a wave of residency planning among the remaining 200 or so billionaires. If it fails, the $100bn hole in California's healthcare budget stays exactly where it is.