California voters to decide world's first billionaire wealth tax

Proposition 40 seeks 5% levy on ultra-wealthy to fund healthcare, dividing state leaders and sparking an exodus of the rich

By LineZotpaper AI staff

Published24 October 2026

Read Time3 min

California voters head to the polls on Nov 3 to decide on Proposition 40, a ballot measure that would impose a one-time 5% wealth tax on the state's more than 200 billionaires to raise an estimated $100 billion for healthcare, backfilling federal funding cuts. The proposal has divided the state's leaders and sparked a flight of some of its wealthiest residents, with polls showing a tight race.

Californians will vote on Nov 3 on Proposition 40, potentially the world's first targeted billionaire wealth tax. The measure would levy a one-time 5% tax on the net worth of state residents with fortunes exceeding $1 billion, retroactive to Jan 1, 2026. Proponents say the $100 billion raised is needed to prevent a collapse of the state's healthcare system due to sweeping federal tax and spending cuts signed into law by President Donald Trump.

The measure has sharply divided California's leadership. Supporters such as Vermont Senator Bernie Sanders and SEIU-United Healthcare Workers West Chief of Staff Suzanne Jimenez argue it is a matter of fairness and necessity. Jimenez called the measure a "short-term solution" to stave off a healthcare collapse. Sanders, speaking at a Los Angeles rally, said billionaires believe they have a "God-given right to rule" but will "learn a very powerful lesson" at the ballot box. Nvidia CEO Jensen Huang has publicly backed the tax, telling CBS: "I don't mind paying taxes. The more you make, the more taxes you pay. I'm okay with that. I am the ultimate American Dream."

Opposition has been fierce. Outgoing Governor Gavin Newsom has warned the tax will drive wealthy residents and their crucial income tax revenue out of the state. Several billionaires have already left or threatened to do so. Google co-founder Sergey Brin has donated over $100 million to a political nonprofit funding opposition ballot measures. Don Hankey, a Los Angeles billionaire who relocated to Nevada, told Forbes the proposal made him feel "a little bit like I wasn't wanted" despite the thousands of jobs his company created in the state. DoorDash co-founder Andy Fang called the measure "stupid" and said it "makes it irresponsible for me not to plan leaving the state." Mark Zuckerberg, who could owe $12.5 billion under the tax, received a new stock deal from Meta to incentivise him to remain in California.

The economic debate echoes international experience. Kristian Niemietz of the Institute of Economic Affairs argues wealth taxes are "more trouble than they are worth," citing suppressed investment and capital flight. In Norway, a 2022 tax increase led to a record exodus of the super-wealthy, while a Swiss study found a 0.1 percentage point increase in a wealth tax reduced taxable wealth by 3.5%.

Polls from the Berkeley Institute of Governmental Studies and the Los Angeles Times show a divided electorate: 45% of likely voters in favour, 42% opposed, and 13% undecided. Businessman Tom Steyer, a billionaire who ran for governor earlier this year, said he will vote for the tax despite believing the measure is "problematic" in its writing, calling it necessary to protect vulnerable Californians.

Analysis

Why This Matters

The vote could set a historic global precedent for taxing extreme wealth to fund public services, potentially inspiring similar measures in other states and countries.
It forces voters to weigh the urgent need for healthcare funding against the risk of driving away the wealthy residents who form the foundation of California's economy.
The outcome will test whether economic inequality is a decisive political issue capable of outweighing concerns about tax competitiveness and capital flight.

Background

Wealth taxes were once common in Europe but have fallen out of favour, now existing only in Spain, Norway, and Switzerland. Studies highlight tensions; a Norwegian tax rise in 2022 drove a record exodus of the super-wealthy, and a Swiss study found a 0.1 percentage point wealth tax increase reduced taxable wealth by 3.5%.
California boasts the world's fourth-largest economy but also the highest share of homeless people in the US and stark income inequality. A poll found 72% of residents believe the wealth gap is widening.
Proposition 40 is a direct response to sweeping federal cuts signed by President Donald Trump that are expected to slash billions in healthcare funding to the state.

Key Perspectives

Suzanne Jimenez (SEIU-UHW): Says the measure is a "short-term solution" necessary to prevent the "collapse of our healthcare system" due to federal cuts.
Bernie Sanders: Campaigning for the measure, Sanders said billionaires believe they have a "God-given right to rule" and will "learn a very powerful lesson" on election day.
Gavin Newsom: The outgoing governor opposes the tax, warning it will drive wealthy residents out of the state and remove their income tax revenue.
Don Hankey (Billionaire): Felt "a little bit like I wasn't wanted" and left California for Nevada despite having created thousands of jobs in the state.
Andy Fang (DoorDash co-founder): Called the proposal "stupid" and said it made staying in California "irresponsible."
Tom Steyer (Billionaire): Supports the tax despite believing the measure is "problematic" in its writing, because it is needed to protect vulnerable Californians.
Jensen Huang (Nvidia CEO): Stated, "I don't mind paying taxes... I am the ultimate American Dream," in support of paying the levy.
Kristian Niemietz (Institute of Economic Affairs): Believes wealth taxes are "more trouble than they are worth," causing administrative issues, lower investment, and capital flight.

What to Watch

The final vote tally on Nov 3; with 13% of voters undecided, the outcome hinges on last-minute persuasion and turnout.
Whether the threatened exodus of billionaires materialises if the tax passes, and its impact on state revenue and corporate headquarters.
The broader political fallout, particularly whether the measure becomes a blueprint for similar proposals across the United States.

Sources

Are California voters about to impose world's first 'tax on billionaires'? · BBC News

Checked

12 claims in this story checked against 1 source: 7 supported.

Show each claim

Partly supportedProposition 40 would be the world’s first billionaire wealth tax.BBC News: ““I believe this is the first billionaire tax - meaning a wealth tax that is targeting a very extreme percentile of the wealth distribution,” says Francesco Trebbi”
Partly supportedThe proposal has sparked an exodus of California’s richest residents.BBC News: “At least six of the state’s 200 plus billionaires have reportedly left California ahead of that deadline to avoid the tax.”
SupportedCalifornia voters will decide Proposition 40 on Nov. 3.BBC News: “Well, I think on Nov 3 they’re going to learn a very powerful lesson”
SupportedProposition 40 would impose a one-time 5% tax on the net worth of California billionaires, of whom there are more than 200.BBC News: “Proposition 40 is aimed at levying a one-time 5% tax on the net worth of all of California’s billionaires. There are a little more than 200 such individuals in the state”
Partly supportedThe measure is expected to raise $100 billion to backfill healthcare funding cuts.BBC News: “The move aims to raise $100bn (£75bn) to make up for federal funding cuts to the state’s health-care system.”
Not in the sourcesThe federal tax and spending cuts were signed into law by President Donald Trump.BBC News: “massive federal funding cuts coming to California as a result of President Donald Trump’s sweeping tax and spending bill”
SupportedThe tax would apply retroactively to Jan. 1, 2026.BBC News: “The California measure, if approved, would apply retroactively to those with a net worth of at least $1bn who resided in California as of 1 January 2026.”
SupportedSuzanne Jimenez called the measure a “short-term solution.”BBC News: “Suzanne Jimenez, chief of staff for Service Employees International Union-United Healthcare Workers West, which helped lead the charge for the initiative, says the measure is a “short-term solution””
SupportedBernie Sanders said billionaires believe they have a “God-given right to rule” and will “learn a very powerful lesson” at the ballot box.BBC News: “Sanders said billionaires “believe, like the monarchs of the 19th century, that they have a God-given right to rule”. “They have all the wealth; they got all the power, and who the hell do you think you are challenging them? Well, I think on Nov 3 they’re going to learn a very powerful lesson””
SupportedJensen Huang said, “I don't mind paying taxes. The more you make, the more taxes you pay. I'm okay with that. I am the ultimate American Dream.”BBC News: ““I don’t mind paying taxes. The more you make, the more taxes you pay. I’m okay with that,” the Nvidia chief executive said in an interview with the BBC’s news partner in the US, CBS. “I am the ultimate American Dream.””
Partly supportedDon Hankey said the proposal made him feel “a little bit like I wasn't wanted,” despite the thousands of jobs his company created in California.BBC News: ““I think we’ve created a lot of jobs in California. We have a few thousand people working for us and we have a profit sharing plan. And I have to leave the state,” he added, saying the measure made him feel like he wasn’t “wanted” in the state.”
SupportedA September poll found 45% of likely voters in favour, 42% opposed and 13% undecided.BBC News: “A September poll, external from the Berkeley Institute of Governmental Studies and the Los Angeles Times found the proposition has not clearly won over a majority of voters, with 45% of likely voters in favour of the tax, 42% opposed and 13% undecided.”