California Ballot Measures Propose Historic Billionaire Tax

California’s economy ranks as the largest in the United States and fourth in the world, surpassing the GDPs of India and the United Kingdom, yet it simultaneously holds the highest number of homeless individuals and one of the widest wealth gaps in the nation. On November 3, voters will decide whether to adopt Proposition 40, a measure that would impose a one-time 5% tax on the net worth of every billionaire residing in the state. If passed, this would mark the first time a US state levies a direct tax on the extreme upper end of the wealth distribution, a move that has drawn sharp debate among policymakers, business leaders, and the public.

The push for this levy began as a response to significant federal funding cuts to the state’s healthcare system, a consequence of the sweeping tax and spending bill passed under President Donald Trump. Supporters argue that the state needs immediate financial resources to prevent a collapse in services while they work out a long-term funding strategy. Suzanne Jimenez, a leader with the Service Employees International Union, described the measure as a necessary short-term fix. She noted that without action, the healthcare system would deteriorate as the state seeks a more permanent solution to sustain care costs.

The timeline for this initiative has accelerated due to political and economic pressures. For decades, wealth taxes were common in Europe but have largely disappeared, with only Spain, Norway, and Switzerland maintaining them. In the US, inequality has reached its highest level in over three decades, with the top 1% of households holding nearly 32% of all wealth in the third quarter of 2025. This backdrop has fueled a sense of urgency among advocates who view the tax as a way to rebalance the economic scale and address what they see as a growing disparity between the rich and the rest of the population.

The campaign faces strong opposition from prominent figures, including Governor Gavin Newsom, whose term is ending. Newsom warns that the tax could drive wealthy residents and their associated income tax revenue out of the state. This concern is not merely theoretical, as at least six billionaires have already relocated, including Google co-founders Larry Page and Sergey Brin, venture capitalist Peter Thiel, former Uber CEO Travis Kalanick, and Hankey Group founder Don Hankey. Hankey told Forbes that he moved to Nevada because the proposal made him feel unwelcome, despite the jobs his companies have created in the region.

The financial implications for remaining billionaires are substantial. Mark Zuckerberg, chief executive of Meta, informed the company’s board last month that he is considering moving his primary residence outside of California. To mitigate the potential loss of billions in personal wealth, Meta agreed to a new stock deal that grants him additional shares. If the tax passes, Zuckerberg could owe as much as $12.5 billion. Meanwhile, DoorDash co-founder Andy Fang has publicly criticized the measure, calling it stupid. These reactions highlight the significant personal stakes involved for the state’s most prominent tech leaders.

Public opinion remains closely divided. A September poll conducted by the Los Angeles Times and the Berkeley Institute of Governmental Studies found that 45% of likely voters support the measure, while 42% oppose it. The remaining 13% are undecided, a group that could determine the final outcome since a simple majority is required for passage. The campaign has received significant financial backing from both sides, including a donation of more than $100 million from Google co-founder Sergey Brin to a political organization funding measures that could block the tax.

Proponents argue that the tax is fair and necessary, with Nvidia chief Jensen Huang stating in an interview with CBS that he does not mind paying taxes and accepts the principle that those who earn more should contribute more. Senator Bernie Sanders reinforced this sentiment at a rally in Los Angeles, suggesting that billionaires often believe they have a God-given right to rule. He predicted that voters would send a powerful message on November 3, challenging the prevailing wealth distribution. These voices represent the anti-elite, anti-system sentiment that public policy professor Francesco Trebbi says is driving the measure.

Trebbi, a public policy professor at the University of California, Berkeley, believes this is the first true billionaire tax, targeting a very extreme percentile of the wealth distribution. He argues that the initiative is not just about the specific policy details of Proposition 40 but is a broader effort to re-balance the scale in a society where 72% of Californians believe the gap between rich and poor is widening. The Public Policy Institute of California reports that a similar share of residents feels the state government should do more to address these disparities.

The outcome of this vote will have broader implications for other states considering similar levies. Washington state voters are currently weighing a 9.9% tax on income over $1 million a year, often referred to as a millionaire tax. Dr. Kristian Niemietz of the Institute of Economic Affairs argues that such wealth taxes are generally more trouble than they are worth, a view that aligns with the skepticism of many opponents in California. As the November 3 election approaches, the focus remains on whether California’s unique position as an economic powerhouse and a site of high inequality will lead to a historic shift in how the nation taxes its wealthiest residents.

In the coming days, the campaign will intensify, with both sides aiming to sway the undecided majority. The measure, if approved, would apply retroactively to anyone worth at least $1 billion who lived in California as of January 1, 2026. This retroactive element adds complexity to the debate, raising questions about fairness and implementation. Ultimately, the decision rests with the voters, who must weigh the immediate benefits of $100 billion for healthcare against the potential long-term economic effects on the state’s population of over 200 billionaires.