California Wealth Tax: Prop 40 Targets 200 Billionaires

Voters in California will decide on November 3 whether to impose a one-time 5% tax on the net worth of the state's billionaire residents.

The measure, known as Proposition 40, targets a little more than 200 individuals, including Mark Zuckerberg, Oprah Winfrey, Kim Kardashian, and George Lucas. If approved, the tax would generate approximately $100 billion, or £75 billion, to offset federal funding cuts to the state's healthcare system resulting from the tax and spending bill signed by President Donald Trump.

Suzanne Jimenez of Service Employees International Union-United Healthcare Workers West described the proposal 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, identified the measure as likely the first of its kind in the world, noting it targets the most extreme percentile of the wealth distribution.

Governor Gavin Newsom, whose term is ending, opposes the tax, warning it may drive wealthy residents and their income tax revenue out of the state. The Los Angeles Times reported that Google cofounder Sergey Brin has donated more than $100 million to a political organization funding efforts to block the measure. A September poll by the newspaper and the Berkeley Institute of Governmental Studies found 45% of likely voters support the levy, while 42% oppose it and 13% remain undecided. A majority vote is required for passage.

The tax would apply retroactively to anyone worth at least $1 billion who resided 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 executive Travis Kalanick, and Hankey Group founder Don Hankey. Hankey told Forbes he moved to Nevada because the proposal made him feel unwelcomed despite the jobs his companies created.

Meta chief Mark Zuckerberg told the company board last month he is considering moving his primary residence out of California. Meta agreed to a new stock deal to provide him with additional shares to offset potential losses; he could owe up to $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, stating that higher income should correlate with higher tax payments.

Senator Bernie Sanders addressed a rally in Los Angeles, saying billionaires believe they have a God-given right to rule. He predicted voters would teach them a powerful lesson on November 3. Washington state is also considering a 9.9% tax on income exceeding $1 million annually. Kristian Niemietz of the Institute of Economic Affairs noted that only Spain, Norway, and Switzerland currently maintain wealth taxes, describing such levies as more trouble than they are worth.

Data from the third quarter of 2025 shows the top 1% of US households hold nearly 32% of the nation's wealth, the highest level in over three decades. The Public Policy Institute of California found that 72% of Californians believe the gap between rich and poor is widening. Trebbi characterized the sentiment behind the measure as anti-elite, stating it aims to re-balance the scale rather than focus solely on the specific mechanics of Proposition 40.