Prop 40: California's 200 Billionaires Face $100 Billion One-Time Levy

California voters will decide in November whether to impose a one-time 5% tax on the net worth of the state's billionaires. Proposition 40 targets the more than 200 individuals who have moved to the state to live. The measure aims to raise $100 billion to offset federal cuts to the healthcare system caused by President Donald Trump's tax and spending legislation. Supporters argue the funds are necessary to prevent a collapse in care.

Suzanne Jimenez of the Service Employees International Union-United Healthcare Workers West described the proposal as a short-term fix. She stated, "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." The state has the largest economy in the United States and the fourth largest globally, yet it also holds the nation's largest share of homeless people. Public policy professor Francesco Trebbi from the University of California, Berkeley, noted that this is likely the first tax specifically targeting the extreme upper percentile of wealth distribution.

Governor Gavin Newsom, whose term is ending, opposes the measure. He warned that the tax could drive wealthy residents and their income tax revenue out of the state. Google cofounder Sergey Brin has donated over $100 million to a political group funding ballot measures that could block the tax. A September poll by the Los Angeles Times and the Berkeley Institute of Governmental Studies found 45% of likely voters in favor, 42% opposed, and 13% undecided. A majority is required for the measure to pass.

If approved, the tax would apply retroactively to anyone worth at least $1 billion who lived in California as of January 1, 2026. At least six billionaires have reportedly left the state, including Google cofounders Larry Page and Sergey Brin, venture capitalist Peter Thiel, former Uber boss Travis Kalanick, and Don Hankey. Hankey told Forbes he moved to Nevada because he felt unwelcome. Meta chief Mark Zuckerberg told his board last month he was considering moving his primary residence out of the state. He could owe as much as $12.5 billion under the new law.

Some wealthy residents support the levy. Nvidia chief Jensen Huang told CBS, "I don't mind paying taxes. The more you make, the more taxes you pay. I'm okay with that." Senator Bernie Sanders told a Los Angeles rally that billionaires believe they have a "God-given right to rule" and predicted they would learn a powerful lesson on November 3. Washington state voters are also weighing a 9.9% tax on income over $1 million a year, while only Spain, Norway, and Switzerland in Europe maintain similar wealth levies. The top 1% of households in the United States held nearly 32% of wealth in the third quarter of 2025.

Trebbi said the measure is driven by an anti-elite, anti-system sentiment. He added that the effort is really not about Proposition 40, but about trying to re-balance the scale a little bit. Some 72% of Californians say the gap between rich and poor is widening, and a similar share says state government should do more, according to the Public Policy Institute of California.