California Billionaires Face Historic 5% Wealth Tax in November Vote

California residents face a high-stakes decision this November that could reshape the financial landscape for the state's wealthiest residents. Proposition 40 is on the ballot, proposing a one-time 5% tax on the net worth of every billionaire living in California. If approved, this would be a historic move, potentially forcing individuals like Oprah Winfrey, Mark Zuckerberg, Kim Kardashian, and George Lucas to pay billions of dollars into the state's healthcare system.

The primary driver for this measure is the need to cover significant federal funding cuts. Supporters argue that the tax would raise approximately $100 billion to fill the gap left by President Donald Trump's recent tax and spending legislation. Suzanne Jimenez of the Service Employees International Union-United Healthcare Workers West described the proposal as a short-term solution to prevent a collapse of the healthcare system while longer-term funding strategies are developed. She emphasized that inaction would lead to severe consequences for the state's medical infrastructure.

Despite California holding the largest economy of any U.S. state and ranking fourth globally, the wealth distribution remains stark. The state has the nation's largest share of homeless people and one of the widest wealth gaps. Francesco Trebbi, a public policy professor at the University of California, Berkeley, noted that this would likely be the first billionaire tax targeting such an extreme percentile of the wealth distribution. He suggested the measure is driven by a broader anti-elite sentiment aimed at re-balancing the economic scale rather than just the specific mechanics of the proposal.

Governor Gavin Newsom, whose term is ending, is a prominent opponent of the tax. He warns that the levy could drive wealthy residents and their income tax revenue out of the state. This concern is supported by recent data indicating that at least six billionaires have already left California. Among them are Google cofounders Larry Page and Sergey Brin, venture capitalist Peter Thiel, former Uber chief Travis Kalanick, and Hankey Group founder Don Hankey. Hankey told Forbes that he moved to Nevada because the proposal made him feel unwanted despite the jobs his companies created.

The political battle has drawn significant financial backing from both sides. Google cofounder Sergey Brin has contributed over $100 million to a political organization funding ballot measures that could block the tax. A September poll 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, leaving 13% undecided. Since a majority is required to pass the proposal, the undecided voters will be crucial in determining the outcome on November 3.

If the tax passes, it will apply retroactively to anyone with a net worth of at least $1 billion who lived in California as of January 1, 2026. This retroactive nature has caused anxiety among tech leaders. Meta chief Mark Zuckerberg told the company's board last month that he is considering moving his primary residence out of the state. To mitigate potential losses of up to $12.5 billion, Meta agreed to a new stock deal giving him additional shares. DoorDash cofounder Andy Fang was more blunt in his opposition, calling the measure stupid.

However, not all billionaires are against the levy. Nvidia chief Jensen Huang told CBS, the BBC's U.S. partner, that he does not mind paying taxes and believes those who make more should pay more. Senator Bernie Sanders also voiced strong support at a Los Angeles rally, stating that billionaires believe they have a God-given right to rule. He predicted that voters would teach them a powerful lesson if the tax passed, reflecting a growing frustration with the concentration of wealth in the state.

California is not the only state considering such measures, though its approach is unique. Washington state voters are also weighing a millionaires tax, which would levy 9.9% on income over $1 million annually. Internationally, wealth taxes were once common in Europe but are now rare, with only Spain, Norway, and Switzerland still maintaining them. Dr. Kristian Niemietz of the Institute of Economic Affairs described such levies as more trouble than they are worth, highlighting the global shift away from taxing wealth directly.

The national context adds urgency to the California vote. U.S. inequality is near its highest level in over three decades, with the top 1% of households holding nearly 32% of wealth in the third quarter of 2025. According to the Public Policy Institute of California, 72% of Californians believe the gap between rich and poor is widening. A similar percentage says the state government should do more to address this disparity. As the election date approaches, the outcome will signal a major shift in how America handles extreme wealth and public health funding.

Ultimately, Proposition 40 represents a test of how much citizens are willing to tax the ultra-wealthy to fund essential services. The debate has transcended simple fiscal policy, becoming a referendum on economic fairness and state power. With millions of dollars in political spending and high-profile endorsements from both sides, the November vote could set a precedent for other states looking to address their own funding shortfalls and wealth inequalities.