California voters weigh 'world's first' tax on billionaires

California voters are about to decide whether the state's billionaires, among them Oprah Winfrey, Mark Zuckerberg, Kim Kardashian and George Lucas, should hand over billions of dollars to fund healthcare. Proposition 40, on the ballot in November, would impose a one-time 5% tax on the net worth of every billionaire living in the state, who number a little more than 200.

Supporters say it would raise $100bn (£75bn) to plug federal funding cuts to California's healthcare system stemming from President Donald Trump's sweeping tax and spending bill. Suzanne Jimenez of Service Employees International Union-United Healthcare Workers West, which helped lead the campaign, calls the measure a "short-term solution", telling the BBC: "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."

California has the largest economy of any US state and the fourth largest in the world, bigger than India or the UK, yet it also has the nation's largest share of homeless people and one of its widest wealth gaps. Francesco Trebbi, a public policy professor at the University of California, Berkeley, said he believes this is the first billionaire tax, one targeting a very extreme percentile of the wealth distribution.

Perhaps the most prominent opponent is Governor Gavin Newsom, whose tenure is ending; he warns the tax could drive wealthy residents and their income tax revenue out of California. Google cofounder Sergey Brin has given more than $100m to a political organisation funding ballot measures that could block it, the Los Angeles Times reports; a September poll by the newspaper and the Berkeley Institute of Governmental Studies found 45% of likely voters in favour, 42% opposed and 13% undecided. A majority is needed to pass.

If approved, the tax would apply retroactively to anyone worth at least $1bn who lived in California as of 1 January 2026. At least six of the state's billionaires have reportedly left, among them 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 over the proposal, saying it made him feel he was not "wanted" despite the jobs his companies created.

Meta chief Mark Zuckerberg told the company's board last month he was considering moving his primary residence out of California. Meta, which is headquartered in the state, agreed to a new stock deal giving him even more shares to cover the billions he would lose; he could owe as much as $12.5bn. DoorDash cofounder Andy Fang called the measure "stupid".

Some billionaires back the tax. "I don't mind paying taxes. The more you make, the more taxes you pay. I'm okay with that," Nvidia chief Jensen Huang told CBS, the BBC's US partner. Senator Bernie Sanders told a Los Angeles rally that billionaires believe they have "a God-given right to rule" and predicted that "on November 3 they're going to learn a very powerful lesson".

California is not alone: Washington state voters are weighing a "millionaires tax" of 9.9% on income over $1m a year. And while wealth taxes were once fairly common in Europe, only Spain, Norway and Switzerland still have them, said Dr Kristian Niemietz of the Institute of Economic Affairs, who calls such levies "more trouble than they are worth".

US inequality is near its highest in over three decades, with the top 1% of households holding nearly 32% of wealth in the third quarter of 2025. Some 72% of Californians say the gap between rich and poor is widening, and a similar share says state government should do more, per the Public Policy Institute of California. Trebbi said the measure is driven by an "anti-elite, anti-system sentiment" and is "really not about Prop 40" but about trying to "re-balance the scale a little bit".