California voters decide on one-time 5% tax for billionaires

California voters will decide in November whether to impose a one-time 5% levy on the net worth of the state's billionaires. The measure, known as Proposition 40, targets more than 200 residents, including Oprah Winfrey, Mark Zuckerberg, Kim Kardashian, and George Lucas. The primary goal is to generate $100 billion to address federal funding cuts to the state's healthcare system.

Supporters argue the revenue is necessary to prevent a collapse in medical services caused by recent federal tax and spending legislation. Suzanne Jimenez of the Service Employees International Union-United Healthcare Workers West described the proposal as a short-term fix. She stated that without action, the healthcare system is facing a collapse while longer-term funding solutions are debated.

Governor Gavin Newsom, whose term is ending, leads the opposition. He warns that the tax could drive wealthy residents out of California, taking their income tax revenue with them. Google cofounder Sergey Brin has donated over $100 million to a political organization funding ballot measures that could block the proposal. A September poll by the Los Angeles Times and the Berkeley Institute of Governmental Studies found 45% of likely voters in favor, 42% opposed, and 13% undecided.

If approved, the tax would apply retroactively to anyone worth at least $1 billion who lived in California as of 1 January 2026. At least six billionaires have reportedly left the state in response to the proposal. These individuals include Google cofounders Larry Page and Sergey Brin, venture capitalist Peter Thiel, former Uber boss Travis Kalanick, and Hankey Group founder Don Hankey. Hankey told Forbes he moved to Nevada because the proposal made him feel unwelcome despite the jobs his companies created.

Mark Zuckerberg told Meta's board last month that he is considering moving his primary residence out of the state. Meta agreed to a new stock deal to give him additional shares to cover potential losses. He could owe as much as $12.5 billion if the measure passes. DoorDash cofounder Andy Fang called the measure stupid in public remarks.

Some high-profile billionaires support the levy. Nvidia chief Jensen Huang told CBS that he does not mind paying taxes and believes that higher earners should pay more. Senator Bernie Sanders addressed a rally in Los Angeles, stating that billionaires believe they have a God-given right to rule. He predicted that voters would give them a powerful lesson on 3 November.

The proposal is part of a wider trend in the United States. Washington state voters are also weighing a 9.9% millionaires tax on annual income over $1 million. Dr Kristian Niemietz of the Institute of Economic Affairs noted that only Spain, Norway, and Switzerland currently maintain wealth taxes in Europe. He described such levies as more trouble than they are worth.

US inequality reached near its highest levels in over three decades. The top 1% of households held nearly 32% of wealth in the third quarter of 2025. A Public Policy Institute of California survey found that 72% of residents believe the gap between rich and poor is widening. Francesco Trebbi, a public policy professor at the University of California, Berkeley, said the measure is driven by anti-elite sentiment and aims to re-balance the scale.