Californians vote on 5% billionaire levy

California voters will decide in November whether to impose a one-time 5% tax on the net worth of the state's billionaires. The measure, known as Proposition 40, aims to generate $100 billion to fund healthcare.

The tax targets more than 200 residents, including Oprah Winfrey, Mark Zuckerberg, Kim Kardashian, and George Lucas. Supporters argue the revenue will plug funding gaps caused by federal cuts stemming from President Donald Trump's recent tax and spending legislation. Suzanne Jimenez of Service Employees International Union-United Healthcare Workers West described the proposal as a short-term solution. She told the BBC that inaction would lead to a collapse of the healthcare system while longer-term funding methods are developed.

Francesco Trebbi, a public policy professor at the University of California, Berkeley, stated this may be the first billionaire tax targeting an extreme percentile of the wealth distribution. California holds the largest economy in the United States and the fourth largest globally, exceeding the economies of India and the United Kingdom. Despite this wealth, the state has the nation's largest share of homeless people and one of its widest wealth gaps.

Governor Gavin Newsom opposes the measure as his term ends. He warns the tax could drive wealthy residents and their income tax revenue out of the state. Google cofounder Sergey Brin has donated more than $100 million to a political organization funding ballot measures that might block the levy, according to the Los Angeles Times. A September poll by the newspaper and the Berkeley Institute of Governmental Studies found 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 on January 1, 2026. At least six billionaires have reportedly left the state, including Larry Page, Sergey Brin, Peter Thiel, Travis Kalanick, and Don Hankey. Hankey told Forbes he moved to Nevada because the proposal made him feel unwanted despite the jobs his companies created.

Meta chief Mark Zuckerberg told the company board last month he was considering moving his primary residence out of California. Meta agreed to a new stock deal giving him additional shares to cover potential losses, which could reach $12.5 billion. DoorDash cofounder Andy Fang called the measure stupid. Jensen Huang, chief executive of Nvidia, told CBS he does not mind paying taxes and that higher incomes mean higher tax bills.

Senator Bernie Sanders told a Los Angeles rally that billionaires believe they have a God-given right to rule. He predicted voters would teach them a powerful lesson on November 3. Washington state voters are also weighing a 9.9% millionaires tax on income over $1 million. Dr Kristian Niemietz of the Institute of Economic Affairs noted that while wealth taxes were once common in Europe, only Spain, Norway, and Switzerland still have them. He called such levies 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. A Public Policy Institute of California survey found 72% of Californians say the gap between rich and poor is widening. A similar share says the state government should do more. Trebbi said the measure is driven by anti-elite sentiment and is really not about Proposition 40 but about trying to re-balance the scale a little bit.