UNITED STATES | TUNGARU PRESS | October 25, 2026
California is facing a heated political and economic debate as voters prepare to decide whether the state's wealthiest residents should pay a one-time tax on their fortunes to help support healthcare services.
The controversial proposal, known as Proposition 40, would introduce a 5% tax on the total net worth of billionaires living in California, potentially affecting more than 200 of the state's richest individuals.
Prominent figures who could be affected include Meta chief executive Mark Zuckerberg, television personality and entrepreneur Kim Kardashian, media mogul Oprah Winfrey and filmmaker George Lucas.
Supporters believe the measure could generate billions of dollars to protect healthcare services and address growing economic inequality. Critics, however, warn that the proposal could encourage wealthy residents to relocate, potentially damaging California's economy and reducing future tax revenue.
The debate has already divided political leaders, business executives and residents ahead of the November vote.
A $100 Billion Plan to Protect Healthcare
Proposition 40 aims to raise approximately $100 billion (£75 billion) to help compensate for reductions in federal healthcare funding.
The proposal comes amid concerns about the financial consequences of sweeping tax and spending legislation introduced under US President Donald Trump.
Supporters argue that California needs additional resources to prevent serious disruptions to its healthcare system, particularly for vulnerable and low-income communities.
Suzanne Jimenez, chief of staff at the Service Employees International Union-United Healthcare Workers West, which has helped lead the campaign, described the proposed tax as an emergency measure to address the state's immediate healthcare funding challenges.
She warned that without additional financial support, California could face major difficulties maintaining essential medical services while policymakers work toward longer-term funding solutions.
Advocates also argue that the state's wealthiest individuals should contribute more to public services, particularly during periods of financial pressure.
California's Growing Wealth Divide
California is home to some of the world's most successful technology companies, entertainment businesses and wealthy entrepreneurs.
With an economy larger than those of several major countries, including India and the United Kingdom, the state ranks among the world's largest economic powers.
However, its extraordinary wealth exists alongside significant social and economic challenges.
California has one of the highest concentrations of billionaires globally, yet it also accounts for the largest share of America's homeless population and experiences substantial income and wealth inequality.
Francesco Trebbi, a public policy professor at the University of California, Berkeley, described Proposition 40 as a potentially historic attempt to tax individuals at the very top of the wealth distribution.
He suggested that the measure reflects growing public concern about the widening financial gap between wealthy households and ordinary residents.
For supporters, the proposed tax represents an opportunity to redistribute a small portion of extreme wealth toward essential public services.
Opponents, however, question whether such measures can achieve their intended goals without creating wider economic consequences.
Billionaires Push Back Against Proposed Tax
The proposal has triggered strong resistance from several influential technology executives and business leaders.
Google co-founder Sergey Brin has reportedly contributed more than $100 million to a political organisation supporting ballot initiatives that could prevent the wealth tax from taking effect.
California Governor Gavin Newsom has also emerged as a prominent opponent of the proposal.
Newsom has expressed concern that imposing a substantial tax on billionaires could encourage them to leave California, taking with them significant income tax contributions and potentially affecting investment and employment.
The issue has divided voters as well.
A September survey conducted by the Berkeley Institute of Governmental Studies and the Los Angeles Times found that 45% of likely voters supported Proposition 40, while 42% opposed it and 13% remained undecided.
The proposal requires approval from a majority of voters to become law.
Wealthy Residents Reportedly Relocating
The proposed tax has already prompted reports of several billionaires leaving California.
Under the measure, the levy would apply retrospectively to individuals with a net worth of at least $1 billion who were California residents on January 1, 2026.
At least six wealthy individuals have reportedly relocated ahead of that date or in anticipation of the proposal.
Among those named in reports are Google co-founders Larry Page and Sergey Brin, venture capitalist Peter Thiel, former Uber chief executive Travis Kalanick and businessman Don Hankey.
Hankey, founder of the Hankey Group and a longtime Los Angeles resident, reportedly moved to neighbouring Nevada because of concerns about the proposed tax.
Speaking to Forbes, he argued that his businesses had created thousands of jobs in California and provided employees with profit-sharing opportunities.
He expressed disappointment that the proposed policy had made him feel unwelcome in the state where he had spent his life.
Other technology executives have also raised concerns about the potential financial consequences.
Mark Zuckerberg Could Face Multibillion-Dollar Tax Bill
Meta chief executive Mark Zuckerberg is among the prominent business leaders reportedly considering relocating his primary residence because of Proposition 40.
Zuckerberg, whose personal fortune is estimated to exceed $200 billion, could face a tax bill of approximately $12.5 billion if the proposal becomes law.
According to reports, Meta's board agreed to a new stock arrangement designed to help compensate Zuckerberg for the potential financial impact of the levy.
The arrangement would provide him with additional company shares.
His possible departure has raised concerns because Meta maintains its headquarters in California and plays a major role in the state's technology economy.
Meanwhile, DoorDash co-founder Andy Fang, whose wealth is estimated at $1.6 billion, has publicly criticised the proposed tax.
Fang argued that the measure could make it necessary for wealthy entrepreneurs to consider leaving California to protect their financial interests.
Not All Billionaires Oppose the Proposal
Despite resistance from several high-profile business leaders, some wealthy Californians have expressed support for Proposition 40.
Nvidia chief executive Jensen Huang has indicated that he would be comfortable paying the proposed tax.
Huang has argued that people who earn more should expect to contribute more through taxation, describing his own financial success as an example of the opportunities available in the United States.
Billionaire businessman Tom Steyer, who previously made an unsuccessful attempt to become California governor, has also said he intends to support the measure.
Although Steyer acknowledged concerns about how the proposal was drafted, he argued that protecting vulnerable Californians should remain a priority.
Their positions highlight divisions among wealthy individuals over how governments should address inequality and finance public services.
Bernie Sanders Backs Tax on Billionaires
US Senator Bernie Sanders has joined the campaign supporting Proposition 40, arguing that extreme concentrations of wealth have given billionaires disproportionate influence over American politics and society.
Speaking at a rally in Los Angeles, Sanders criticised the political power enjoyed by some of the country's richest individuals.
He suggested that wealthy elites had become accustomed to exercising enormous influence and should be challenged through democratic processes.
Sanders urged voters to support the proposed tax during the November 3 election.
His involvement has brought additional national attention to the campaign, connecting California's debate to broader discussions about economic inequality across the United States.
Economists Divided Over Wealth Taxes
While supporters view Proposition 40 as an opportunity to address inequality, some economists question whether wealth taxes are effective over the long term.
Kristian Niemietz, head of political economy at the Institute of Economic Affairs, has argued that such taxes can create administrative difficulties, discourage investment and encourage wealthy individuals to relocate.
He also questioned whether wealth taxes consistently generate sufficient revenue to justify their economic consequences.
Wealth taxes were once more common across Europe but have gradually disappeared from many countries.
According to Niemietz, Spain, Norway and Switzerland are among the few European nations that continue to impose broad taxes on personal wealth.
Norway experienced a reported increase in wealthy residents leaving the country after changes to its wealth tax in 2022.
Research examining Switzerland's system also found that increases in wealth taxation were associated with reductions in reported taxable wealth.
Critics argue that these examples demonstrate the difficulties governments face when attempting to tax highly mobile wealthy individuals.
Supporters counter that carefully designed policies could help reduce inequality while generating much-needed public revenue.
Washington State Considers Similar Tax Measures
California is not the only American state considering higher taxes on wealthy residents.
Voters in Washington state are also examining a proposed millionaires tax that would impose a 9.9% tax on annual income exceeding $1 million.
Although the Washington proposal targets high incomes rather than accumulated wealth, both measures reflect growing political pressure to increase contributions from the richest households.
The debates are taking place against a backdrop of widening economic inequality across the United States.
Federal Reserve data indicates that the wealthiest 1% of American households controlled nearly 32% of the country's total wealth during the third quarter of 2025.
That level of concentration is among the highest recorded in more than three decades.
Public Concern Over Economic Inequality
Economic inequality has become an increasingly important issue for California residents.
A statewide survey by the Public Policy Institute of California found that approximately 72% of respondents believed the gap between rich and poor was growing.
A similar proportion felt the state government should take stronger action to address economic disparities.
These findings suggest that concerns about inequality extend beyond the immediate debate over Proposition 40.
Professor Trebbi believes the proposal reflects broader public frustration with wealthy elites and established political and economic systems.
He suggested that voters may view the measure as an opportunity to create a fairer balance between those who hold enormous financial resources and the wider population.
A Defining Vote for California's Economic Future
As California approaches the November 3 vote, Proposition 40 has become a major test of public attitudes toward wealth, taxation and economic fairness.
Supporters believe the measure could provide critical financial support for healthcare while ensuring billionaires contribute more toward the state's public needs.
Opponents warn that the tax could accelerate the departure of wealthy residents, weaken investment incentives and reduce future government revenue.
The outcome could also influence similar policy discussions elsewhere in the United States, particularly as governments search for ways to fund essential services while addressing growing inequality.
For California, the decision presents a difficult question: Can the state require its wealthiest residents to contribute more without risking the economic activity and tax revenue they generate?
The answer will ultimately rest with voters as they decide whether Proposition 40 should become law.
Source: BBC News, with information attributed to the Los Angeles Times, Forbes
