California voters decide if billionaires pay 5% to fund healthcare

California holds the largest economy in the United States and ranks fourth globally, a status that surpasses both India and the United Kingdom. Despite this economic weight, the state also carries the nation's largest population of homeless people and one of the widest gaps between its wealthiest and poorest residents. This tension sits at the center of a ballot question facing voters in November.

Proposition 40 proposes a one-time tax of 5 percent on the net worth of every billionaire residing in the state. The measure targets a little more than 200 individuals, including tech executives, entertainment figures, and business founders. If passed, the levy would apply retroactively to anyone who lived in California and possessed at least $1 billion in assets as of January 1, 2026.

Supporters argue the tax is a necessary step to stabilize the state's healthcare system. Suzanne Jimenez of the Service Employees International Union-United Healthcare Workers West described the measure as a short-term solution to prevent a collapse in services. She told the BBC that inaction would lead to a breakdown while the state searches for a longer-term funding mechanism. The initiative aims to raise $100 billion to cover federal funding cuts resulting from a sweeping tax and spending bill signed by President Donald Trump.

Francesco Trebbi, a public policy professor at the University of California, Berkeley, believes this is the first billionaire tax of its kind. He notes that it targets a very extreme percentile of the wealth distribution. Trebbi said the measure is driven by an anti-elite and anti-system sentiment. He argued that the vote is really about trying to re-balance the scale a little bit rather than just about the specific provisions of Prop 40.

Governor Gavin Newsom, whose tenure is ending, is the most prominent opponent of the measure. He warns that the tax could drive wealthy residents and their income tax revenue out of the state. A September poll by the Los Angeles Times and the Berkeley Institute of Governmental Studies found that 45 percent of likely voters support the measure, while 42 percent oppose it. Thirteen percent remain undecided, meaning a majority is required for passage.

Several billionaires have already moved out of the state. At least six have reportedly left, including Google cofounders Larry Page and Sergey Brin, venture capitalist Peter Thiel, former Uber boss Travis Kalanick, and Hankey Group founder Don Hankey. Hankey told Forbes he moved to Nevada because the proposal made him feel he was not wanted, despite the jobs his companies created. Google cofounder Sergey Brin has given more than $100 million to a political organization funding ballot measures that could block the tax.

Meta chief Mark Zuckerberg told the company's board last month that he was considering moving his primary residence out of California. Meta agreed to a new stock deal giving him additional shares to cover the potential loss. He could owe as much as $12.5 billion if the tax passes. DoorDash cofounder Andy Fang called the measure stupid. In contrast, Nvidia chief Jensen Huang told CBS that he does not mind paying taxes and that the more he makes, the more taxes he pays.

Senator Bernie Sanders spoke at a Los Angeles rally, stating that billionaires believe they have a God-given right to rule. He predicted that voters would teach them a very powerful lesson on November 3. The state is not alone in considering such levies, as Washington state voters are weighing a 9.9 percent millionaires tax on income over $1 million a year. Dr. Kristian Niemietz of the Institute of Economic Affairs noted that while wealth taxes were once common in Europe, only Spain, Norway, and Switzerland still have them.

US inequality is near its highest level in over three decades, with the top 1 percent of households holding nearly 32 percent of wealth in the third quarter of 2025. A similar share of Californians say the gap between rich and poor is widening and that the state government should do more to address it, according to the Public Policy Institute of California. The November vote will determine whether these residents pay the new levy or remain in the state under the current tax structure.