200 Californians Face $100 Billion One-Time Wealth Levy

California voters will decide in November whether to impose a one-time 5% tax on the net worth of the state’s 200 billionaires. The measure, known as Proposition 40, would apply retroactively to anyone who resided in the state and held at least $1 billion in assets as of January 1, 2026. If passed, the levy aims to generate $100 billion for healthcare funding.

Suzanne Jimenez, a leader of the Service Employees International Union-United Healthcare Workers West, described the proposal as a short-term fix for a system under pressure from federal budget cuts. She warned that inaction could lead to a collapse of the healthcare infrastructure while the state seeks a longer-term funding model. The state’s economy is the largest in the United States and the fourth largest globally, yet it also contains the highest number of homeless residents and a wide wealth gap.

Governor Gavin Newsom has opposed the measure, arguing it may drive wealthy residents and their associated tax revenue out of California. His concerns align with the reported departure of at least six billionaires, including Google co-founders Larry Page and Sergey Brin, venture capitalist Peter Thiel, and former Uber chief Travis Kalanick. Don Hankey, founder of the Hankey Group, told Forbes he moved to Nevada because the proposal made him feel unwanted despite his companies' local job creation.

Meta chief Mark Zuckerberg, who could owe up to $12.5 billion under the new tax, told his board last month he was considering relocating his primary residence. To offset potential losses, Meta agreed to a stock deal granting him additional shares. The Los Angeles Times reported that Sergey Brin has donated over $100 million to a political organization working to block the measure. A September poll by the Los Angeles Times and the Berkeley Institute of Governmental Studies found 45% of likely voters supporting the tax, 42% opposing it, and 13% undecided.

Francesco Trebbi, a public policy professor at the University of California, Berkeley, noted that this would be the first tax of its kind, targeting the extreme upper percentile of the wealth distribution. He said the measure reflects an anti-elite sentiment aimed at rebalancing the economic scale. Meanwhile, Washington state voters are considering a different approach, weighing a 9.9% income tax on earnings above $1 million annually.

The debate occurs against a backdrop of rising inequality in the United States. The top 1% of households held nearly 32% of the nation's wealth in the third quarter of 2025, a level not seen in over three decades. According to the Public Policy Institute of California, 72% of state residents believe the gap between the rich and poor is widening and that the government should act to address it.

Public opinion on the levy is mixed among the ultra-wealthy. Nvidia chief Jensen Huang told CBS that he does not mind paying taxes and that higher earners should pay more. In contrast, DoorDash co-founder Andy Fang called the measure stupid. Senator Bernie Sanders told a rally in Los Angeles that billionaires believe they have a God-given right to rule and would learn a powerful lesson if the tax passes on November 3.