Are California voters about to impose world's first 'tax on billionaires'?

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Are California voters about to impose world's first 'tax on billionaires'? - Published Few places on the planet have as many ultra-wealthy residents as California, a US state known for glamour, coastal mega-mansions and being home to many rich and famous. Now voters are about to decide if the mega-rich among them - names that include media mogul Oprah Winfrey, Meta head Mark Zuckerberg, Skims cofounder and reality television star Kim Kardashian and filmmaker George Lucas - should hand over billions of dollars to pay for improvements to healthcare. Proposition 40 is aimed at levying a one-time 5% tax on the net worth of all of California's billionaires. There are a little more than 200 such individuals in the state - but that hasn't stopped the measure from dividing leaders and causing some of its ultra-wealthy residents to flee. One billionaire businessman says he's brought jobs to California, but the proposition made him feel "a little bit like I wasn't wanted". - What are the US midterms? A simple guide - Published6 October But the vote is also offering regular everyday residents a voice on an issue that has riled politics for decades. "I believe this is the first billionaire tax - meaning a wealth tax that is targeting a very extreme percentile of the wealth distribution," says Francesco Trebbi, a public policy professor at the University of California, Berkeley. He noted the measure's historic nature and how it could help even out California's wealth gap. The state has the largest economy in the country - and boasts the fourth largest global economy, bigger than India and the whole of the UK. And it is home to one of the highest concentrations of billionaires in the globe. But it also has the largest share of homeless people in the nation and one of the highest wealth gaps. Those who back the measure have argued it helps ensure that the ultra-wealthy are contributing their fair share and will help backfill gaps in the state's budget. The move aims to raise $100bn (£75bn) to make up for federal funding cuts to the state's health-care system. Suzanne Jimenez, chief of staff for Service Employees International Union-United Healthcare Workers West, which helped lead the charge for the initiative, says the measure is a "short-term solution" for massive federal funding cuts coming to California as a result of President Donald Trump's sweeping tax and spending bill. "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 told the BBC. While the ballot measure has many supporters - including some billionaires like Nvidia CEO Jensen Huang - it has faced fierce opposition from a variety of figures, from billionaires to the state's liberal governor. Google co-founder Sergey Brin has given more than $100 million to a political nonprofit funding ballot measures that could block the wealth tax, the Los Angeles Times reports, external. California Governor Gavin Newsom, whose tenure is coming to an end, is perhaps the most notable political leader opposing it. He has voiced concerns that the measure could cause the wealthy to leave the state and drive out their crucial income tax revenue. A September poll, external from the Berkeley Institute of Governmental Studies and the Los Angeles Times found the proposition has not clearly won over a majority of voters, with 45% of likely voters in favour of the tax, 42% opposed and 13% undecided. The statewide ballot measure would need to be approved by a majority of residents. California is not the first place to toy with the idea of taxing the rich. Also on the West Coast, voters in US state of Washington are considering whether to accept or reject a "millionaires tax" - a 9.9% tax on income over $1m a year. While wealth taxes were once a fairly common form of taxation in Europe, they have rapidly fallen out of favour and now only exist in three European countries – Spain, Norway and Switzerland, says Dr Kristian Niemietz, head of political economy at the Institute of Economic Affairs. Niemietz believes wealth taxes are "more trouble than they are worth" because they cause administrative issues, suppress investment, lead to capital flight and, in the end, do not raise much revenue, she said. In the case of Norway, a local news organisation found that an increase in the wealth tax led to more super wealthy people leaving the country in 2022, external than in the preceding 13 years combined. A study on Switzerland, external found that a 0.1 percentage point increase in a wealth tax reduced taxable wealth by 3.5%. The California measure, if approved, would apply retroactively to those with a net worth of at least $1bn who resided in California as of 1 January 2026. At least six of the state's 200 plus billionaires have reportedly left California ahead of that deadline to avoid the tax. They include Google co-founders Larry Page and Sergey Brin, venture capitalist Peter Thiel, former Uber CEO Travis Kalanick and Hankey Group founder Don Hankey. Hankey, a Los Angeles billionaire who has lived in California all his life, told Forbes he left for the state of Nevada as a result of the proposed wealth tax. "I think we've created a lot of jobs in California. We have a few thousand people working for us and we have a profit sharing plan. And I have to leave the state," he added, saying the measure made him feel like he wasn't "wanted" in the state. Meta chief executive Mark Zuckerberg told the company's board last month that he was thinking of moving his primary residence out of California over the proposed tax. To prevent him from leaving the state - where the company is headquartered - Meta agreed to a new stock deal that gives Zuckerberg, whose wealth is estimated to exceed $200bn, even more shares in the company to make up for the billions he would lose if the measure passes in November. Estimates say he could owe as much as $12.5bn. DoorDash cofounder Andy Fang, who has an estimated net worth of $1.6bn, has called the measure "stupid" and wrote on X that "proposals like this make it irresponsible for me not to plan leaving the state". Meanwhile, businessman Tom Steyer, who ran an unsuccessful bid for California governor earlier this year, is one of the few billionaires who has said, external he would vote in favour of the tax. Steyer said that although he believes the way the measure is written is "problematic", it is necessary to protect vulnerable Californians. Huang, too, has expressed support of paying the levy. "I don't mind paying taxes. The more you make, the more taxes you pay. I'm okay with that," the Nvidia chief executive said in an interview with the BBC's news partner in the US, CBS. "I am the ultimate American Dream." Senator Bernie Sanders of Vermont, a vocal champion against income inequality, has campaigned in support of Prop 40. While at a Los Angeles rally, Sanders said billionaires "believe, like the monarchs of the 19th century, that they have a God-given right to rule". "They have all the wealth; they got all the power, and who the hell do you think you are challenging them? Well, I think on Nov 3 they're going to learn a very powerful lesson". Income inequality in the US is at some of its highest levels, external in over three decades, with the top 1% of households owning nearly 32% of all US wealth in the third quarter of 2025. It is also near historic highs in California. Economic inequality is a concern among most Californians, with 72% believing that the gap between the rich and poor is widening and a similar share holding that state government should do more to reduce the gap, according to a statewide survey, external from the Public Policy Institute of California. Trebbi says it is an "anti-elite, anti-system sentiment that is behind a policy" like Prop 40. "This is really not about Prop 40," he says. It's about trying to "re-balance the scale a little bit".