Proposition 40 aims to raise $100 billion for California health care

Retroactive eligibility uses $1 billion net worth on January 1, 2026

Proposition 40 would aim to raise $100 billion (£75 billion) to make up for federal funding cuts to California’s health-care system. Supporters say the measure would also help backfill gaps in the state budget and ensure that the ultra-wealthy contribute their fair share. The ballot proposal gives residents a say in a question that has riled politics for decades.

The one-time 5% tax on net worth would reach a little more than 200 people in California. If approved, it would apply retroactively to those with net worth of at least $1 billion who resided in California on January 1, 2026. BBC News cited media mogul Oprah Winfrey, Meta head Mark Zuckerberg, Skims cofounder and reality television star Kim Kardashian, and filmmaker George Lucas among the state’s mega-wealthy residents.

A September poll by the Berkeley Institute of Governmental Studies and the Los Angeles Times found 45% of likely voters in favor of Proposition 40, 42% opposed and 13% undecided. The result did not show that the proposition had clearly won over a majority of voters. The statewide ballot measure requires approval by a majority of residents.

Service Employees International Union-United Healthcare Workers West helped lead the campaign for the initiative. Suzanne Jimenez, the union’s chief of staff, called it a “short-term solution” for the 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,” Jimenez said.

Francesco Trebbi, a public policy professor at the University of California, Berkeley, said, “I believe this is the first billionaire tax - meaning a wealth tax that is targeting a very extreme percentile of the wealth distribution.” He noted the measure’s historic nature and said it could help even out California’s wealth gap.

California Governor Gavin Newsom, whose tenure is coming to an end, opposes Proposition 40. He has voiced concerns that the measure could cause wealthy residents to leave the state and drive out crucial income-tax revenue.

Google co-founder Sergey Brin has given more than $100 million to a political organization funding ballot measures that could block the wealth tax, the Los Angeles Times reported.

At least six of California’s 200-plus billionaires reportedly left ahead of the January 1 deadline to avoid the tax. Those identified 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 had lived in California all his life, told Forbes that he left for Nevada because 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 said. He added that the measure made him feel as though he was not “wanted” in the state.

Meta chief executive Mark Zuckerberg told the company’s board last month that he was considering moving his primary residence out of California over the proposed tax. To keep him in the state, where Meta is headquartered, the company agreed to a new stock deal that would give Zuckerberg more shares to account for billions he could owe if the measure passes in November. His wealth is estimated to exceed $200 billion, and estimates put his potential tax bill at as much as $12.5 billion.

DoorDash cofounder Andy Fang, whose net worth is estimated at $1.6 billion, called the measure “stupid” and wrote on X that “proposals like this make it irresponsible for me not to plan leaving the state.”

Businessman Tom Steyer, who ran an unsuccessful bid for California governor earlier this year, is one of the few billionaires reported to have said he would vote in favor of the tax. He said the way the measure was written was “problematic” but that it was necessary to protect vulnerable Californians.

Nvidia CEO Jensen Huang also supports the levy. “I don’t mind paying taxes. The more you make, the more taxes you pay. I’m okay with that,” Huang said in an interview with CBS, which BBC News described as its US partner. “I am the ultimate American Dream.”

Vermont Senator Bernie Sanders, a vocal champion against income inequality, has campaigned in support of Proposition 40. At the “Ballots Over Billionaires” rally in Los Angeles on October 5, Sanders said billionaires “believe, like the monarchs of the 19th Century, that they have a God-given right to rule.” He said: “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 November 3 they’re going to learn a very powerful lesson.”

California has the country’s largest economy and the world’s fourth-largest, larger than India and the United Kingdom. The state is home to one of the globe’s highest concentrations of billionaires. It also has the largest share of homeless people in the nation and one of the highest wealth gaps.

Income inequality in the United States is at some of its highest levels in over three decades, with the top 1% of households owning nearly 32% of all U.S. wealth in the third quarter of 2025. California is also near historic highs. A statewide Public Policy Institute of California survey found that 72% of Californians believe the gap between the rich and poor is widening, while a similar share said state government should do more to reduce it. Trebbi called the driving sentiment “anti-elite, anti-system sentiment.” “This is really not about Prop 40,” he said, but rather about trying to “re-balance the scale a little bit.”

Washington voters are separately considering whether to accept or reject a “millionaires tax” of 9.9% on annual income above $1 million. Wealth taxes were once a fairly common form of taxation in Europe but rapidly fell out of favor, Dr. Kristian Niemietz, head of political economy at the Institute of Economic Affairs, said. He said they now exist in only three European countries: Spain, Norway and Switzerland.

Niemietz believes wealth taxes are “more trouble than they are worth” because they cause administrative issues, suppress investment, lead to capital flight and do not raise much revenue. A local news organization in Norway found that an increase in the country’s wealth tax led to more super-wealthy people leaving in 2022 than during the preceding 13 years combined. A study in Switzerland found that a 0.1 percentage-point increase in a wealth tax reduced taxable wealth by 3.5%.