California Billionaires Brace For Vote On 5% Wealth Tax

California voters on Nov. 3 will decide Proposition 40, a one-time 5% tax on the wealth of billionaires who lived in the state on Jan. 1, 2026. The measure targets assets rather than annual income, aiming to raise approximately $110 billion from 260 residents listed on the Forbes billionaires roster as of early October. Those individuals collectively hold nearly $2.5 trillion in net worth.

The campaign to enact the levy has drawn opposition from prominent figures within the state's Democratic establishment. Governor Gavin Newsom, who is widely expected to seek his party's 2028 presidential nomination, opposes the measure, as does Xavier Becerra, the Democrat running to succeed him. Their concern centers on whether billionaires would relocate to states with lower tax rates.

Six Nobel Prize-winning economists signed an open letter endorsing the proposal, calling it the first tax on billionaire wealth enacted anywhere in the world. They wrote that the initiative's design limits the opportunity for residents to relocate before the assessment takes effect, noting the gap between the measure's introduction in late November 2025 and the Jan. 1, 2026 residency determination date was too short for a meaningful exodus. Data cited in the source material indicates the count of California billionaires increased by 20 between January and October.

The timeline leading to the ballot includes several moves by technology founders ahead of the residency cutoff. In the weeks surrounding Christmas 2025, Google's Sergey Brin and co-founder Larry Page shifted business interests out of the state and purchased homes elsewhere. Travis Kalanick, former chief executive of Uber, departed for Texas, and Peter Thiel changed his residence to Miami.

Brin has helped organize roughly $200 million in spending to defeat Proposition 40. That funding also supports two companion measures on the same ballot, Proposition 41 and Proposition 42, which would restrict retroactive taxation and limit new levies on financial assets and personal property. A September poll cited in the source material showed Proposition 40 polling just below 50% approval.

Economists at Stanford University estimated the measure would generate about $30 billion in revenue, offset by nearly $39 billion in lost income tax revenue over time when adjusted to present value. Other analyses cited in the source material project the taxable pool could shrink by roughly 10% if residents employ avoidance strategies. Real estate would remain outside the tax base, and double taxation treaties could exempt foreign nationals.

Enrico Moretti of the University of California Berkeley and Daniel Wilson of the Federal Reserve Bank of San Francisco have studied how wealthy households respond to state levies. Their work on estate taxes found that by 2017, states with such taxes had lost 23 of the 72 Forbes 400 members who resided there in 2001. The value of Forbes 400 wealth subject to state estate taxes declined from about $203 billion in 2001 to roughly $122 billion in 2017.

California currently sets its top marginal income tax rate at 13.5%, while Florida charges no state income tax. New York imposes a 10.9% state income tax plus a 3.9% city levy; according to an Oxfam report cited in the source material, New York state is home to 154 billionaires, with nine of the ten wealthiest residing in New York City.

The ballot count in California is scheduled for Nov. 3, 2026. Federal filings cited in the source material show Elon Musk, Jeff Bezos, Warren Buffett and Michael Bloomberg reported little or no tax liability in recent years, according to reporting by ProPublica.