California Voters Decide on 5% Billionaire Tax

California holds the largest economy in the United States, yet it also has the highest number of homeless residents in the country. On November 3, voters will decide whether to impose a one-time 5% tax on the net worth of billionaires living in the state.

Proposition 40 targets approximately 200 individuals with assets exceeding $1 billion. If passed, the measure would apply retroactively to anyone who resided in California on January 1, 2026. Supporters estimate the levy will raise $100 billion to offset federal funding cuts to the state’s healthcare system resulting from President Donald Trump’s tax and spending legislation.

Suzanne Jimenez of the Service Employees International Union-United Healthcare Workers West described the proposal as a necessary interim fix. "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," she told the BBC. Francesco Trebbi, a public policy professor at UC Berkeley, noted that this appears to be the first tax of its kind aimed at the extreme upper end of the wealth distribution.

Governor Gavin Newsom, whose term is ending, opposes the measure. He warns it could encourage wealthy residents to leave the state, taking their income tax revenue with them. Google cofounder Sergey Brin has donated over $100 million to a political group backing ballot measures that may block the tax. A September poll by the Los Angeles Times and the Berkeley Institute of Governmental Studies shows 45% of likely voters in favor, 42% opposed, and 13% undecided. A majority is required for passage.

Several high-profile residents have already moved or are considering leaving. At least six billionaires, including Google cofounders Larry Page and Sergey Brin, venture capitalist Peter Thiel, former Uber CEO Travis Kalanick, and Hankey Group founder Don Hankey, have reportedly relocated. Hankey told Forbes he moved to Nevada because the proposal made him feel unwelcome despite his companies' job creation. Meta chief Mark Zuckerberg informed his board last month that he is weighing a move. The company agreed to a new stock deal to help cover a potential $12.5 billion bill. DoorDash cofounder Andy Fang called the measure "stupid."

Not all wealthy residents oppose the levy. Nvidia chief Jensen Huang told CBS that he does not mind paying taxes and accepts the principle that higher earners should pay more. Senator Bernie Sanders spoke at a Los Angeles rally, stating that billionaires believe they have a "God-given right to rule" and predicted they would learn a "very powerful lesson" on election day.

The vote comes as US inequality approaches its highest level 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 Californians believe the gap between rich and poor is widening. Washington state voters are also considering a 9.9% income tax on earners making over $1 million annually, while only Spain, Norway, and Switzerland currently maintain wealth taxes in Europe.