California Considers First-Ever State Wealth Tax on Billionaires

California could become the first American State to tax the net worth of billionaires under Proposition 40, a ballot measure proposed on November 3, 2026. The measure would place a one-time 5% tax on residents whose net worth goes above $1 billion. Most of the money collected would replace federal funding cuts to healthcare. Backers say the State will lose $100 billion in federal healthcare funds over five years. SEIU United Healthcare Workers West leads the supporters, and union president Lorena Gonzalez said the tax is needed to keep the healthcare system safe. Vermont Senator Bernie Sanders also supports the proposal to fight wealth inequality.

Opposition and Polls

Democratic Governor Gavin Newsom opposes the measure, warning that it will cause wealthy residents to move out and take their tax money with them. California's budget relies heavily on income taxes from its richest people. Other traditional Democratic groups, such as Planned Parenthood and the California Teachers Association, also oppose it over worries about the budget impact and how the revenue is divided. Tech moguls and venture capitalists have poured millions into a political action committee to fight the measure, raising roughly 10 times more than the yes side. A mid-October poll by the Public Policy Institute of California showed 52% of likely voters planned to vote no, while 46% planned to vote yes.

Billionaire Responses

Billionaires have already reacted to the proposal. Google co-founders Sergey Brin and Larry Page started cutting ties with California after the measure was unveiled. Mark Zuckerberg said he would stay in California for eight years and made a deal with Meta to help pay the tax without losing his company ownership. Even if a majority of voters approve Proposition 40, it could be blocked if at least one of two counter-measures on the ballot passes and gets more yes votes. These counter-measures are backed by a political action committee called Building a Better California, which has raised over $333 million, with about 30% coming from Sergey Brin.

Context

Wealth taxes on the ultra-rich have been a major point of debate in American politics for years, with progressive leaders pushing for them at both state and national levels. California serves as a major hub for the technology industry and is home to many of the world's richest individuals, making any tax policy changes there a closely watched model for the rest of the country.