California Weighs One-Time Billionaire Tax

California voters will decide on November 3 whether the state’s billionaires must pay a one-time tax to fund healthcare. The measure, known as Proposition 40, targets individuals with a net worth of at least $1 billion who lived in the state as of January 1, 2026. If approved, the levy would take 5% of their total wealth.

Supporters say the tax would raise $100 billion to offset federal funding cuts. These cuts resulted from President Donald Trump’s tax and spending bill, which reduced money flowing into California’s healthcare system. Suzanne Jimenez, a leader with the Service Employees International Union-United Healthcare Workers West, described the measure as a temporary fix. She told the BBC, "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 state has the largest economy in the United States and ranks fourth globally. It is larger than the economies of India and the United Kingdom. Despite this wealth, California holds the nation's largest share of homeless people and has one of the widest wealth gaps. Francesco Trebbi, a public policy professor at the University of California, Berkeley, noted that this appears to be the first tax specifically targeting billionaires. He described it as a levy on an extreme percentile of the wealth distribution.

Governor Gavin Newsom, whose term is ending, is a prominent opponent. He warns the tax could push wealthy residents out of the state, taking their income tax revenue with them. Google co-founder Sergey Brin has donated more than $100 million to a political group funding measures that could block the proposal, 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 vote is required to pass the measure.

The tax applies retroactively to anyone worth at least $1 billion who resided in California on January 1, 2026. At least six billionaires have reportedly left the state. Among them are Google co-founders Larry Page and Sergey Brin, venture capitalist Peter Thiel, former Uber chief Travis Kalanick, and Hankey Group founder 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 his board last month that he was considering moving his primary residence. Meta, headquartered in the state, agreed to a new stock deal giving him additional shares to cover potential losses. He could owe as much as $12.5 billion under the new law. DoorDash co-founder Andy Fang called the measure "stupid."

Some billionaires support the tax. Nvidia chief Jensen Huang told CBS, a partner of the BBC, that he does not mind paying taxes. He stated, "The more you make, the more taxes you pay. I'm okay with that." Senator Bernie Sanders spoke at a Los Angeles rally, saying billionaires believe they have "a God-given right to rule." He predicted that on November 3, they would learn "a very powerful lesson."

Other regions are also debating wealth taxes. Washington state voters are weighing a 9.9% tax on income over $1 million a year. In Europe, wealth taxes were once common but are now rare. Only Spain, Norway, and Switzerland still have them. Dr. Kristian Niemietz of the Institute of Economic Affairs called such levies "more trouble than they are worth."

Wealth inequality in the United States is 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 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, anti-system sentiment" and is "really not about Prop 40" but about trying to "re-balance the scale a little bit."