California Ballot Measure Targets Billionaires for One-Time Wealth Levy

Residents of California will head to the polls in November to decide if the state's ultra-wealthy citizens should contribute a significant portion of their fortunes to support the healthcare system. This decision centers on Proposition 40, a measure that would impose a one-time 5% tax on the net worth of every individual in the state whose assets exceed one billion dollars. More than 200 people currently qualify for this levy, including prominent figures such as Oprah Winfrey, Mark Zuckerberg, Kim Kardashian, and George Lucas.

The primary goal of the proposal is to generate approximately $100 billion. This revenue is intended to offset federal funding reductions that have strained California's healthcare infrastructure following the implementation of President Donald Trump's recent tax and spending legislation. Suzanne Jimenez, a representative for Service Employees International Union-United Healthcare Workers West, described the initiative as a temporary fix. She noted that without action, the state faces a potential collapse of its healthcare services while it works toward a more permanent funding solution.

The debate is occurring against a backdrop of extreme economic disparity. California boasts the largest economy in the United States and ranks as the fourth largest globally, surpassing nations like India and the United Kingdom. However, the state also has the highest number of homeless people in the country and one of the widest gaps between the rich and the poor. Francesco Trebbi, a public policy professor at the University of California, Berkeley, believes this may be the first billionaire tax of its kind, targeting the most extreme segment of the wealth distribution.

Governor Gavin Newsom, whose term is ending, has emerged as a prominent opponent of the measure. He warns that the tax could prompt wealthy residents to leave the state, thereby reducing the state's income tax base. According to the Los Angeles Times, Google cofounder Sergey Brin has donated over $100 million to a political group supporting ballot measures that could block the proposal. A September poll by the newspaper and the Berkeley Institute of Governmental Studies showed that 45% of likely voters support the tax, 42% oppose it, and 13% remain undecided. Since a majority is required for passage, the undecided voters are crucial.

If the measure passes, it will apply retroactively to anyone worth at least $1 billion who was a resident of California as of January 1, 2026. Several billionaires have already relocated, potentially to avoid the tax. These individuals include Google cofounders Larry Page and Sergey Brin, venture capitalist Peter Thiel, former Uber executive 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 had created in the state.

Meta chief Mark Zuckerberg informed his company's board last month that he was considering moving his primary residence out of California. Meta, which is headquartered in the state, approved a new stock deal that grants him additional shares to offset the financial impact of the potential tax. Zuckerberg could owe as much as $12.5 billion if the measure is approved. In contrast, DoorDash cofounder Andy Fang criticized the proposal, calling it a foolish idea in his remarks to the company's leadership.

Not all wealthy individuals oppose the tax. Nvidia chief Jensen Huang told CBS that he has no objection to paying taxes and believes that higher earnings should correspond with higher tax payments. Senator Bernie Sanders spoke at a rally in Los Angeles, suggesting that billionaires often believe they have a divine right to rule. He predicted that voters would send a strong message on November 3.

California is not the only state considering such measures. Voters in Washington state are also weighing a 9.9% tax on income exceeding $1 million annually. While wealth taxes were once more common in Europe, only Spain, Norway, and Switzerland currently maintain them. Kristian Niemietz of the Institute of Economic Affairs argues that these levies often cause more problems than they solve.

The proposal is driven by a sentiment against elite power, according to Trebbi. He noted that the measure is less about the specific tax and more about trying to rebalance the scale of wealth. US inequality has reached levels not seen in over three decades, with the top 1% of households holding nearly 32% of all wealth in the third quarter of 2025. Public opinion surveys indicate that 72% of Californians feel the gap between the rich and the poor is widening and that the state government should take more action to address it.