California Ballot Measure Would Levy 5% Tax on 200 Billionaires

California voters will decide in November whether to impose a one-time 5% tax on the net worth of the state's billionaires.

Proposition 40 targets more than 200 individuals in the state, including Oprah Winfrey, Mark Zuckerberg, Kim Kardashian, and George Lucas. Proponents argue the measure would generate $100 billion to offset federal funding cuts to the state's healthcare system. Suzanne Jimenez of the Service Employees International Union said the tax serves as a "short-term solution" to prevent a collapse in healthcare services while longer-term funding strategies are developed.

Governor Gavin Newsom, whose term is ending, opposes the measure. He warned that the tax could drive wealthy residents and their associated income tax revenue out of California. A September poll by the Los Angeles Times and the Berkeley Institute of Governmental Studies found that 45% of likely voters support the proposal, while 42% oppose it. With 13% of voters undecided, the measure requires a majority to pass.

Several billionaires have already responded to the proposal. Larry Page, Sergey Brin, Peter Thiel, Travis Kalanick, and Don Hankey have reportedly left the state. Hankey told Forbes he moved to Nevada because the proposal made him feel he was not "wanted" despite the jobs his companies created. Mark Zuckerberg told Meta's board he is considering moving his primary residence out of California. The company agreed to a new stock deal to give him more shares, potentially covering a loss of up to $12.5 billion.

Context reveals a state with the largest economy in the United States and the fourth largest in the world. Despite this wealth, California holds the nation's largest share of homeless people and one of the widest wealth gaps. Francesco Trebbi, a public policy professor at the University of California, Berkeley, described the measure as the first billionaire tax targeting a very extreme percentile of the wealth distribution. He noted the measure is driven by an "anti-elite, anti-system sentiment" to re-balance the scale.

Other wealthy residents have taken sides on the issue. Jensen Huang, chief executive of Nvidia, told CBS he does not mind paying taxes and that the amount paid should correlate with income. Senator Bernie Sanders told a Los Angeles rally that billionaires believe they have a "God-given right to rule" and predicted they would learn a powerful lesson on November 3. Meanwhile, Andy Fang, a cofounder of DoorDash, called the measure "stupid".