Prop 40: Newsom's Stalemate with 200 Billionaires Over $100 Billion Health Bill

California residents will vote in November on a measure that could require the state's wealthiest individuals to pay a one-time tax on their net worth. Proposition 40 proposes a 5% levy on every person in the state with assets of at least $1 billion. The tax is designed to raise approximately $100 billion to address gaps in the state's healthcare funding.

The revenue would be directed toward federal funding cuts resulting from President Donald Trump's recent tax and spending legislation. Supporters of the measure argue that the state's healthcare system requires immediate financial support to maintain operations. Suzanne Jimenez of the Service Employees International Union-United Healthcare Workers West described the proposal as a short-term solution. She stated that without action, the state faces a potential collapse of its healthcare infrastructure while longer-term funding strategies are developed.

The tax applies retroactively to anyone who resided in California and held at least $1 billion in net worth as of January 1, 2026. This timing captures individuals who moved to the state during that period. The measure targets a specific group of approximately 200 Californians. Among the named individuals subject to the levy are Oprah Winfrey, Mark Zuckerberg, Kim Kardashian, and George Lucas.

Governor Gavin Newsom, whose term is concluding, opposes the proposal. He warns that the tax may encourage wealthy residents to leave the state, thereby reducing income tax revenue. Sergey Brin, co-founder of Google, has contributed more than $100 million to a political organization that is funding efforts to block the measure. A September poll conducted by the Los Angeles Times and the Berkeley Institute of Governmental Studies found that 45% of likely voters support the tax, 42% oppose it, and 13% remain undecided. A simple majority is required for the measure to pass.

Several high-profile billionaires have already relocated. Reports indicate that at least six of the state's wealthiest residents have moved, including Google co-founders Larry Page and Sergey Brin. Venture capitalist Peter Thiel, former Uber executive Travis Kalanick, and Hankey Group founder Don Hankey are also among those who have left. Hankey told Forbes that his decision to move to Nevada was influenced by the proposal, noting that it made him feel unwelcome despite the jobs his companies created in the state.

Mark Zuckerberg, chief executive of Meta, informed the company's board last month that he is considering changing his primary residence. Meta, which is headquartered in California, approved a new stock deal to give Zuckerberg additional shares. This move is intended to offset the billions of dollars he might lose under the tax, which could amount to $12.5 billion. Andy Fang, co-founder of DoorDash, described the measure as stupid.

Not all billionaires oppose the levy. Jensen Huang, chief executive of Nvidia, told CBS that he does not mind paying taxes. He noted that higher earnings typically correlate with higher tax payments. Senator Bernie Sanders addressed a rally in Los Angeles, stating that billionaires believe they have a God-given right to rule. He predicted that voters would send a powerful lesson on November 3.

The measure fits into a national discussion on wealth inequality. Washington state voters are also considering a 9.9% tax on annual income exceeding $1 million. In Europe, only Spain, Norway, and Switzerland currently maintain wealth taxes. Kristian Niemietz of the Institute of Economic Affairs described such levies as more trouble than they are worth. In the United States, the top 1% of households held nearly 32% of wealth in the third quarter of 2025, the highest level in over three decades.

Francesco Trebbi, a public policy professor at the University of California, Berkeley, noted that this appears to be the first billionaire tax in the world. He said the measure targets the extreme upper percentile of the wealth distribution. Trebbi attributed the drive behind the proposal to anti-elite sentiment. He stated that the vote is less about the specific details of Proposition 40 and more about an attempt to re-balance the scale of wealth in the state.