California voters are preparing to decide whether the state’s billionaires should pay a one-time tax of 5% on their net worth to help fund healthcare services.
The proposal, known as Proposition 40, would apply to people with a net worth of at least $1bn who were residents of California on January 1, 2026. It targets more than 200 billionaires living in the state, including Meta chief executive Mark Zuckerberg, reality television star Kim Kardashian, media mogul Oprah Winfrey and filmmaker George Lucas.
Supporters say the measure could raise approximately $100bn to help offset federal funding cuts affecting California’s healthcare system.
Supporters Say Tax Could Help Protect Healthcare Funding
The initiative has received backing from the Service Employees International Union-United Healthcare Workers West, which helped lead the campaign for the proposal.
Suzanne Jimenez, the union’s chief of staff, described the tax as a short-term response to expected reductions in federal healthcare funding resulting from US President Donald Trump’s tax and spending legislation.
She told the BBC that without action, California could face serious difficulties maintaining its healthcare system while longer-term funding arrangements are developed.
Francesco Trebbi, a public policy professor at the University of California, Berkeley, said the proposal was significant because it specifically targeted the wealthiest segment of the population.
He also linked the initiative to efforts to address California’s wealth gap.
California’s Wealth Gap Fuels Debate Over Tax Proposal
California has the largest state economy in the United States and ranks among the world’s largest economies. It also has one of the highest concentrations of billionaires globally.
However, the state has the largest share of homeless people in the US and a substantial gap between its wealthiest residents and the rest of the population.
A November 2025 survey by the Public Policy Institute of California found that 72% of Californians believed the gap between rich and poor was widening. A similar proportion said the state government should do more to reduce economic inequality.
Nationally, the wealthiest 1% of US households owned nearly 32% of all wealth in the third quarter of 2025, according to figures cited in the report.
Governor Gavin Newsom Opposes the Wealth Tax
California Governor Gavin Newsom has opposed Proposition 40, warning that the proposal could encourage wealthy residents to leave the state.
Newsom has expressed concern that the departure of high-net-worth individuals could reduce the income tax revenue California receives from them.
Google co-founder Sergey Brin has also supported efforts to oppose the measure. The Los Angeles Times reported that he had contributed more than $100m to a political organisation funding ballot measures that could block the wealth tax.
A September poll conducted by the Berkeley Institute of Governmental Studies and the Los Angeles Times found that 45% of likely voters supported the proposal, 42% opposed it and 13% remained undecided.
The measure requires approval from a majority of voters to pass.
Several Billionaires Reportedly Leave California Ahead of Vote
At least six of California’s more than 200 billionaires have reportedly left the state ahead of the proposed tax’s January 1, 2026, residency reference date.
Those reported to have departed include Google co-founders Larry Page and Sergey Brin, venture capitalist Peter Thiel, former Uber chief executive Travis Kalanick and Hankey Group founder Don Hankey.
Hankey, who had lived in California throughout his life, told Forbes that he moved to Nevada because of the proposed levy.
He said his businesses had created thousands of jobs in California and operated a profit-sharing plan, adding that the proposal made him feel as though he was no longer wanted in the state.
Zuckerberg Considers Relocation as Meta Arranges Stock Deal
Meta chief executive Mark Zuckerberg told the company’s board in September that he was considering moving his primary residence out of California because of the proposed tax.
Meta subsequently agreed to a new stock arrangement intended to compensate Zuckerberg for some of the potential financial impact if the measure passes.
Zuckerberg’s wealth is estimated to exceed $200bn, and estimates cited in the report suggest he could face a tax bill of as much as $12.5bn if the proposal becomes law.
DoorDash co-founder Andy Fang, whose net worth is estimated at $1.6bn, has also criticised the initiative. Writing on X, Fang said proposals of this kind made it necessary for him to consider leaving California.
Jensen Huang and Tom Steyer Support the Proposal
Some billionaires have expressed support for the proposed tax, including Nvidia chief executive Jensen Huang and businessman Tom Steyer.
Steyer, who unsuccessfully sought the California governorship earlier in 2026, said the measure had problems in how it was written but was necessary to protect vulnerable residents.
Huang told CBS, the BBC’s US partner, that he was comfortable paying taxes and supported the principle that people who earn more should pay more.
“I don’t mind paying taxes. The more you make, the more taxes you pay. I’m okay with that,” Huang said.
He added that he considered himself an example of the American Dream.
Bernie Sanders Campaigns for Billionaire Tax
US Senator Bernie Sanders of Vermont has also campaigned in support of Proposition 40, making the proposal part of his wider campaign against economic inequality.
Speaking at a rally in Los Angeles, Sanders criticised billionaires for accumulating wealth and political influence.
He compared their position to that of monarchs in the 19th century and said the November 3 vote would give Californians an opportunity to challenge their influence.
Wealth Taxes Face Wider Debate in the United States and Europe
California is not the only jurisdiction considering additional taxes on wealthy residents.
In Washington state, voters are considering a proposal for a 9.9% tax on annual income exceeding $1m.
Wealth taxes have also been used in parts of Europe, although they have declined in popularity. Kristian Niemietz, head of political economy at the Institute of Economic Affairs, said such taxes remained in only three European countries: Spain, Norway and Switzerland.
Niemietz argued that wealth taxes can create administrative difficulties, discourage investment and prompt wealthy people to move their assets or residence elsewhere.
Norway experienced an increase in departures among wealthy residents following a rise in its wealth tax, according to reporting cited in the article. A study examining Switzerland found that a 0.1 percentage-point increase in a wealth tax was associated with a 3.5% reduction in taxable wealth.
Final Decision Rests With California Voters
Proposition 40 has divided political leaders, business figures and wealthy residents as California prepares for the November 3 vote.
Supporters say the proposed levy would help replace federal healthcare funding and address economic inequality, while opponents warn that it could encourage wealthy taxpayers to relocate and reduce state revenue.
The outcome will depend on whether a majority of California voters approve the measure.
