California voters will decide next week whether to impose what one economist calls the first true billionaire tax in the world — a one-time 5% levy on the net worth of the state's roughly 200 billionaires, including Oprah Winfrey, Mark Zuckerberg, Kim Kardashian and George Lucas.
Proposition 40 would apply retroactively to anyone with a net worth of at least $1 billion who lived in California as of January 1, 2026, and is projected to raise $100 billion to offset federal cuts to the state's health-care system. "I believe this is the first billionaire tax — meaning a wealth tax that is targeting a very extreme percentile of the wealth distribution," said Francesco Trebbi, a public policy professor at the University of California, Berkeley.
A fight over who should pay
Backers, led by the Service Employees International Union-United Healthcare Workers West, describe the measure as a stopgap. "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, the union's chief of staff, framing the tax as a response to federal funding cuts tied to President Trump's tax and spending legislation.
Opposition has come from an unusual range of figures. Google co-founder Sergey Brin has given more than $100 million to a political committee fighting the measure, according to the Los Angeles Times, and termed-out Governor Gavin Newsom has warned it could drive out wealthy residents and the income-tax revenue they generate. Not every billionaire is against it: Nvidia chief executive Jensen Huang has voiced support. A September poll from the Berkeley Institute of Governmental Studies and the Los Angeles Times found the race close, with 45% of likely voters in favor, 42% opposed and 13% undecided.
The exodus already underway
At least six of the state's billionaires are reported to have left California ahead of the measure's retroactive deadline, including 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, a lifelong Los Angeles resident, told Forbes the measure made him feel "a little bit like I wasn't wanted" in a state where he said his companies employ thousands of people.
A debate with a track record elsewhere
Wealth taxes were once common in Europe but now survive in only three countries — Spain, Norway and Switzerland — according to Kristian Niemietz of the Institute of Economic Affairs, who argues such taxes raise little revenue relative to the capital flight and administrative costs they create. A Norwegian wealth-tax increase, he noted, was followed by more super-rich residents leaving the country in a single year than in the previous 13 combined. California is not alone in testing the idea: voters in Washington state are weighing a 9.9% "millionaires tax" on income over $1 million a year in the same election. If approved, Proposition 40 would take effect for the 2026 tax year, putting California at the center of a question other states and countries are likely to watch closely.
