As one of the world’s most concentrated hubs of ultra-high-net-worth individuals, California is globally synonymous with sun-drenched coastal mega-mansions, A-list celebrity enclaves, and Silicon Valley’s tech titans. Now, the state’s electorate is set to cast a historic vote on Proposition 40, a ballot measure that would impose a one-off 5% tax on the total net worth of every billionaire residing in the state, with the explicit goal of raising $100 billion to offset crippling federal cuts to California’s public healthcare system.
Crafted as a direct response to sweeping federal tax and spending reductions enacted under the Donald Trump administration, the policy is framed by its backers as a targeted, stopgap solution to prevent a near-term collapse of state healthcare services while long-term sustainable funding frameworks are developed. Proponents, including the Service Employees International Union-United Healthcare Workers West, argue the measure ensures the state’s 200+ billionaires pay their fair share to address glaring structural inequities: California boasts the world’s fourth-largest standalone economy, outstripping the entire gross domestic products of India and the United Kingdom, yet simultaneously hosts the nation’s largest unhoused population and one of the widest wealth gaps in the U.S.
Francesco Trebbi, a leading public policy scholar at the University of California, Berkeley, emphasizes the unprecedented nature of the initiative: “This is the first ever U.S. billionaire tax, a wealth levy targeting the absolute top tier of the wealth distribution, designed to begin narrowing California’s stark wealth disparity.” Public polling underscores broad public appetite for action on inequality, with 72% of California residents surveyed by the Public Policy Institute of California agreeing the wealth gap is widening and state authorities must take aggressive steps to mitigate it. High-profile supporters include Nvidia CEO Jensen Huang, philanthropist and former California gubernatorial candidate Tom Steyer, and progressive U.S. Senator Bernie Sanders, who has campaigned across the state framing the measure as a long-overdue check on unaccountable billionaire power, comparing unregulated elite wealth to 19th-century monarchical excess.
Yet the landmark proposal has ignited ferocious pushback from a cross-section of stakeholders, ranging from tech billionaires to the state’s outgoing liberal governor Gavin Newsom. Newsom has publicly warned the policy risks triggering a mass exodus of the state’s ultra-wealthy residents, eroding the state’s critical income tax revenue base that funds core public services. The Los Angeles Times reports Google co-founder Sergey Brin has poured more than $100 million into political organizations backing competing ballot measures intended to block Proposition 40 entirely. Citing international precedent, Dr. Kristian Niemietz, head of political economy at the Institute of Economic Affairs, argues wealth taxes are functionally counterproductive: once widespread across Europe, such levies now only persist in Spain, Norway and Switzerland, plagued by crippling administrative burdens, suppressed investment, and mass capital flight. He points to 2022 data from Norway showing a wealth tax hike prompted more super-rich residents to leave the country than in the preceding 13 years combined, while Swiss research found a 0.1 percentage point increase in wealth tax rates reduced total taxable wealth by 3.5%.
Even ahead of the January 1, 2026, retroactive residency cutoff for the proposed tax, at least six California billionaires have already relocated out of state to avoid the levy, including Google co-founders Brin and Larry Page, venture capitalist Peter Thiel, former Uber CEO Travis Kalanick, and Los Angeles-based Hankey Group founder Don Hankey, who noted he has created thousands of in-state jobs and ran a profit-sharing program for his employees, yet still felt unwelcome by the policy. Meta CEO Mark Zuckerberg, whose estimated $200 billion net worth could leave him on the hook for a $12.5 billion tax bill if the measure passes, has received a special expanded stock compensation package from Meta’s board to incentivize him to keep his primary residence in California, where the social media firm is headquartered. DoorDash co-founder Andy Fang, with a $1.6 billion net worth, has publicly dismissed the proposal as “stupid” and stated he is actively planning a potential exit from the state.
With a September joint poll from Berkeley’s Institute of Governmental Studies and the Los Angeles Times showing 45% of likely voters supporting the measure, 42% opposing it, and 13% still undecided, the race is a statistical dead heat. California is not the only U.S. West Coast state weighing a levy on extreme wealth: Washington state voters are concurrently considering a separate ballot initiative that would impose a 9.9% tax on annual personal income exceeding $1 million. Analysts note the outcome of California’s Proposition 40 will set a precedent for nationwide wealth policy, as U.S. income inequality currently sits at its highest level in more than three decades, with the top 1% of households holding nearly 32% of all national wealth as of the third quarter of 2025.
Are California voters about to impose ‘world’s first’ tax on billionaires?
