California’s $100bn Tax on Billionaires Heads to a Public Vote

By Nathan Brooks

California’s Proposition 40 would impose a one-time 5% tax on the net worth of about 250 California billionaires, with organizers estimating roughly $100bn in revenue.

California voters will decide Tuesday whether to enact the measure. If approved, most of the money would go to healthcare, compensating for federal cuts from the Trump and Republicans’ 2025 tax bill. Organizers also describe it as the first tax on billionaires anywhere in the world.

George Zimmer, a wealthy Californian writing in support, said California billionaires and their defenders in government and media had offered no valid reason to oppose the measure. He said taxes should reflect ability to pay and treated higher contributions from wealthy residents as a civic duty.

Six Nobel Prize-winning economists support that view. They said Proposition 40 would “kickstart a movement to tax ultra-high-net-worth individuals in other states – and eventually at the federal level and in other countries”.

That support matters because the opponents’ central case depends on economic mobility. Their primary objection is that the tax will send billionaires to lower-tax states, create a hole in California’s tax base and kill the state’s “golden goose,” its trove of innovative minds. Zimmer calls those claims overblown.

What would Proposition 40 change for California?

For the roughly 250 billionaires subject to it, the change would be a one-time payment equal to 5% of net worth. For California, Zimmer said, the money could shore up a healthcare system facing federal cuts. For multimillionaires below the threshold, even paying 5% would not materially change their lives, he said.

“I’m not a billionaire, but I’m a Californian wealthy enough to know that they have no valid reason to fight the proposition,” Zimmer wrote.

Zimmer said the healthcare proceeds would:

• Help prevent hospitals from closing.
• Help prevent millions of people from losing their healthcare coverage.
• Help prevent thousands of healthcare jobs from being cut.

Those are the practical stakes for providers, patients and workers. The broader economic case rests on whether wealth and investment remain in California.

Zimmer cited numerous studies that found no evidence wealthy people flee en masse when taxes rise. After Massachusetts and Washington state raised taxes on high earners in 2022, both recorded increases, not decreases, in their millionaire populations. He also cited a 2023 study showing that, since 2011, California had the second-lowest out-migration rate among households earning more than $200,000.

His own mobility cuts against the exodus argument. Zimmer said he can live wherever he wants but chooses California for its beaches, forests, piers, cable cars and universities. He said he is willing to pay higher taxes to maintain and improve them and does not intend to leave soon.

The departure data provide a narrower test. To avoid the tax, billionaires had to move by January 1, 2026. From what was known when Zimmer wrote, only six had done so. Between 2019 and 2025, California billionaires’ wealth grew by an average 15% per year, while they paid just 0.26% of it in state income taxes.

Even if every billionaire left, it would take 25 years under current California law for the lost tax payments to exceed the $100bn Proposition 40 would raise, according to Zimmer. That calculation makes the feared fiscal loss implausible, he said.

Zimmer also rejected the argument that the levy would end California’s innovation engine. He said wealthy entrepreneurs create products and services, while the state’s industries attract top talent and aspiring industry leaders. He said a one-time 5% tax would not deter people from pursuing a livelihood in entrepreneurial epicenters. So far in 2026, 80% of all new venture capital funding went to California despite the attention surrounding the ballot measure, according to Zimmer.

He said the proposal would add progressivity to California’s tax code and check the power of the richest residents. Zimmer wants less inequality because he believes his family, along with everyone else, will be better off in a more equal society. He argues that outcome should be a win for rich and poor Californians alike.

Zimmer is a member of Patriotic Millionaires, the chairperson, CEO and founder of Generation Tux, an online rental platform for tuxedos and suits. He is also the founder, former CEO and chair of Men’s Wearhouse.

If voters approve, California’s test is whether a one-time 5% tax can raise roughly $100bn for healthcare without the mass exodus opponents predict. How it performs will shape the movement its Nobel Prize-winning supporters hope to begin elsewhere.