California voters are preparing to decide whether the state’s billionaires should pay a one-time tax on their fortunes to help fund healthcare, in a proposal that could reshape the debate over wealth inequality in the United States.
Proposition 40 would impose a one-time tax of 5% on the net worth of California’s billionaires, potentially raising $100 billion (£75 billion) to help offset federal funding cuts affecting the state’s healthcare system.
The proposal has divided politicians, business leaders and wealthy residents, with some supporting the measure as a way to make the ultra-rich contribute more, while others warn it could drive investment and high-income taxpayers out of California.
Among the prominent figures whose fortunes could be affected are Meta chief executive Mark Zuckerberg, Nvidia chief executive Jensen Huang, Google co-founder Sergey Brin, media mogul Oprah Winfrey, reality television star Kim Kardashian and filmmaker George Lucas.
California has more than 200 billionaires, making it one of the world’s major centres of extreme wealth. Yet the state also has the largest share of homeless people in the United States and one of the country’s most pronounced wealth gaps.
The vote has therefore become a wider debate about how the state should distribute the costs of public services and whether taxing billionaire wealth is a practical way to address growing inequality.
Proposition 40 is designed to apply a one-time 5% levy to the net worth of billionaires who were California residents on 1 January 2026.
Supporters estimate that the measure could raise $100 billion to help fill gaps in healthcare funding following cuts introduced through US President Donald Trump’s tax and spending legislation.
Suzanne Jimenez, chief of staff at Service Employees International Union–United Healthcare Workers West, which helped lead the campaign for the proposal, described it as a short-term response to the expected funding shortfall.
“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,” she said
Supporters argue that billionaires have benefited from California’s economy and infrastructure and should contribute more towards maintaining public services.
Francesco Trebbi, a public policy professor at the University of California, Berkeley, said the proposal could be the first wealth tax specifically targeting such an extreme level of wealth.
He also suggested that the measure could help narrow California’s wealth gap.
The tax has attracted support from some wealthy individuals, including Nvidia chief Jensen Huang, who has expressed a willingness to pay more in taxes.
Speaking in an interview with the BBC’s US partner CBS, Huang said: “I don’t mind paying taxes. The more you make, the more taxes you pay. I’m okay with that.”
He added that he considered himself the embodiment of the American Dream.
Businessman Tom Steyer, who unsuccessfully ran for California governor earlier this year, has also said he would vote in favour of the measure. Although he believes the proposal has problems in its current form, he argues that protecting vulnerable Californians makes it necessary.
Senator Bernie Sanders of Vermont has campaigned in support of Proposition 40, presenting it as part of a broader effort to challenge wealth concentration and economic inequality.
At a rally in Los Angeles, Sanders criticised the influence of billionaires in American society and called on voters to support the measure.
However, the proposal has faced substantial opposition, including from California Governor Gavin Newsom.
Newsom has warned that taxing billionaire wealth could encourage wealthy residents to leave the state, potentially reducing the income tax revenue California currently receives from them.
Google co-founder Sergey Brin has reportedly contributed more than $100 million to a political organisation funding ballot measures intended to block the proposed wealth tax, according to the Los Angeles Times.
The prospect of the tax has prompted several billionaires to relocate ahead of the proposed eligibility date.
According to the report, at least six of California’s more than 200 billionaires have reportedly left the state. They include 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, who has lived in California throughout his life, told Forbes that he moved to Nevada because of the proposed tax.
He argued that his businesses had created jobs in California and supported thousands of employees through employment and profit-sharing arrangements.
Hankey said the proposal made him feel “a little bit like I wasn’t wanted” in the state.
The potential departure of wealthy residents has become a central concern for opponents, who argue that a tax intended to raise public revenue could instead encourage people with substantial assets to move elsewhere.
Meta chief executive Mark Zuckerberg has also reportedly considered moving his primary residence out of California.
According to the BBC report, Zuckerberg told Meta’s board last month that he was thinking about relocating because of the proposed tax.
Meta subsequently agreed to a new stock arrangement designed to compensate him for some of the potential financial impact if the measure passes in November.
Zuckerberg’s wealth is estimated to exceed $200 billion, and estimates cited in the report suggest he could face a tax bill of as much as $12.5 billion.
DoorDash co-founder Andy Fang, whose estimated fortune is around $1.6 billion, has also criticised the proposal.
Writing on X, Fang described the measure as “stupid” and argued that proposals of this kind make it necessary for him to consider leaving California.
The possibility of wealthy residents relocating has intensified the argument over whether a one-time wealth tax would deliver its intended revenue or create longer-term economic costs.
Despite the proposal’s high profile, public support remains divided.
A September poll conducted by the Berkeley Institute of Governmental Studies and the Los Angeles Times found that 45% of likely voters supported Proposition 40, while 42% opposed it. A further 13% were undecided.
The measure must secure approval from a majority of voters to pass.
The close polling suggests that the outcome could depend on how voters weigh the prospect of additional healthcare funding against concerns about investment, tax revenue and the possibility of wealthy residents leaving the state.
For supporters, the proposal represents an opportunity to address inequality and protect public services. For opponents, it raises questions about the long-term consequences of imposing a tax on accumulated wealth.
The debate comes amid wider discussions about how governments should tax high-income earners and wealthy individuals.
In Washington state, voters are also considering a proposed 9.9% tax on annual income exceeding $1 million.
Wealth taxes have historically been used in several European countries, although their popularity has declined. According to Kristian Niemietz, head of political economy at the Institute of Economic Affairs, Spain, Norway and Switzerland are the only three European countries that currently maintain wealth taxes.
Niemietz argues that these taxes can create administrative complications, discourage investment and encourage capital flight, while sometimes raising less revenue than expected.
Experiences in other countries have added to the debate.
A Norwegian news organisation found that an increase in the country’s wealth tax was followed by more super-wealthy residents leaving in 2022 than during the preceding 13 years combined.
A study examining Switzerland found that a 0.1-percentage-point increase in a wealth tax reduced taxable wealth by 3.5%.
These examples are frequently cited by critics who argue that wealth taxes can prompt behavioural changes that undermine their intended benefits.
However, supporters of Proposition 40 argue that California’s particular circumstances—including its wealth concentration and anticipated healthcare funding pressures—justify considering an alternative approach.
Economic inequality remains a significant concern in California and across the United States.
The BBC report cites figures showing that the wealthiest 1% of American households owned nearly 32% of all US wealth in the third quarter of 2025.
A statewide survey by the Public Policy Institute of California found that 72% of Californians believed the gap between rich and poor was widening. A similar proportion believed the state government should do more to reduce inequality.
Trebbi said the proposal reflected broader public frustration with economic and political elites.
He argued that the debate was not simply about the details of Proposition 40, but also about whether the balance of wealth and influence in society should change.
That sentiment has helped turn the proposal into a major political issue, drawing support from labour organisations and progressive politicians while provoking resistance from some of the country’s wealthiest business figures.
If Proposition 40 passes, California would introduce a one-time wealth tax targeting billionaires, potentially establishing a model that could influence future debates about taxing extreme wealth elsewhere in the United States.
Its impact would depend on how much revenue the measure generates, how it is implemented and whether wealthy residents change their financial arrangements or leave the state.
If it fails, the result could strengthen the argument that wealth taxes are politically difficult to implement, particularly when opponents warn of investment losses and the departure of major taxpayers.
For California voters, the decision is about more than a tax bill. It is a choice between competing approaches to funding healthcare, reducing inequality and preserving the state’s economic appeal.
With public opinion closely divided and some billionaires already reportedly relocating, the vote could become a defining test of how far voters are willing to go to make the ultra-wealthy contribute more towards public services.
