California Ballot Asks: Should Billionaires Pay a One-Time Wealth Tax?

California, which has the nation's largest economy, is also home to some of the biggest wealth gaps in the country, and voters are now being asked to weigh in on a proposed solution. Proposition 40, a measure appearing on the November ballot, would create a one-time 5% tax on the net worth of every billionaire living in the state, a group that numbers just over 200 individuals.

The measure is designed to generate roughly $100 billion to offset federal cuts to California's health care system. These federal funding reductions are tied to President Donald Trump's broad tax and spending bill. Supporters argue the tax is a necessary stopgap to prevent the state's health care infrastructure from failing. "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," said Suzanne Jimenez of Service Employees International Union-United Healthcare Workers West, a group that helped lead the campaign for the measure. Jimenez described the proposal as a "short-term solution."

If voters approve Proposition 40, the tax would apply to any individual with a net worth of at least $1 billion who was living in California on January 1, 2026. The potential scope of the tax is significant. Some wealthy individuals have already left the state in anticipation of the proposal, including 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 relocated to Nevada over the issue, saying it made him feel he was not "wanted" despite the jobs his companies created.

The measure targets a very narrow slice of the population. Francesco Trebbi, a public policy professor at the University of California, Berkeley, said he believes this would be the first tax of its kind, specifically targeting a "very extreme percentile of the wealth distribution." California is home to many prominent figures who would be subject to the tax, including Oprah Winfrey, Mark Zuckerberg, Kim Kardashian, and George Lucas.

However, the proposal faces significant opposition, including from some of the state's most powerful figures. Governor Gavin Newsom, whose time in office is nearing its end, has warned that the tax could prompt wealthy residents to leave, taking their income tax revenue with them. Google cofounder Sergey Brin has reportedly contributed more than $100 million to a political organization that funds ballot measures capable of blocking it. Mark Zuckerberg, the chief of Meta, told the company's board last month that he was considering changing his primary residence. In response, Meta, which is based in the state, agreed to a new stock deal to give him more shares to cover the billions he could lose; he might owe as much as $12.5 billion.

Polling shows the outcome is far from certain. A September survey by the Los Angeles Times and the Berkeley Institute of Governmental Studies found 45% of likely voters in favor of the measure, 42% opposed, and 13% undecided. A simple majority is required for the proposal to pass. Some wealthy residents have voiced support for the idea. "I don't mind paying taxes. The more you make, the more taxes you pay. I'm okay with that," Nvidia chief Jensen Huang told CBS.

The debate over wealth taxes extends beyond California. Washington state voters are also considering a "millionaires tax" of 9.9% on income over $1 million a year. While wealth taxes were once more common in Europe, only Spain, Norway, and Switzerland still have them, according to Dr. Kristian Niemietz of the Institute of Economic Affairs, who calls such levies "more trouble than they are worth."

The discussion is occurring against a backdrop of high inequality. In the third quarter of 2025, the top 1% of US households held nearly 32% of the nation's wealth. A Public Policy Institute of California survey found that 72% of state residents say the gap between the rich and poor is widening, and a similar share believes the state government should do more to address it. Trebbi said the measure is driven by an "anti-elite, anti-system sentiment" and is "really not about Prop 40" but about trying to "re-balance the scale a little bit."