Few places on Earth pack in as many ultra-wealthy residents as California, a state synonymous with glamour, coastal mega-mansions, and being generally lousy with rich and famous people. Now voters are deciding whether those residents - including Oprah Winfrey, Mark Zuckerberg, Kim Kardashian, and George Lucas - should hand over billions to fund healthcare.
Proposition 40 would levy 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, which apparently was enough to spark a full-blown exodus and a fight among the leadership class. One billionaire businessman said he'd brought jobs to California, but the proposition made him feel "a little bit like I wasn't wanted" - a sentiment presumably unfamiliar to people who have never been told no.
"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, noting the measure's historic nature and its potential to even out California's wealth gap. The state boasts the largest economy in the US and the fourth largest globally - bigger than India and the UK - and one of the world's highest concentrations of billionaires. It also has the nation's largest share of homeless people and one of its highest wealth gaps. So, a mixed report card.
Backers argue the tax ensures the ultra-wealthy pay their fair share and helps backfill budget gaps, aiming to raise $100bn (£75bn) to offset federal funding cuts to the state's healthcare system. Suzanne Jimenez, chief of staff for Service Employees International Union-United Healthcare Workers West, which helped lead the charge, calls it a "short-term solution" for the massive federal cuts coming courtesy 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 tells the BBC.
Support is not universal, even among the wealthy. Nvidia CEO Jensen Huang is on board. Google co-founder Sergey Brin has given more than $100m to a political organisation funding ballot measures that could block the wealth tax, according to the Los Angeles Times. Governor Gavin Newsom, whose tenure is ending, opposes it, warning the wealthy could leave and take their crucial income tax revenue with them.
A September poll from the Berkeley Institute of Governmental Studies and the Los Angeles Times found 45% of likely voters in favour, 42% opposed, and 13% undecided - a statistical shrug. The measure needs a majority to pass.
California isn't the first to flirt with taxing the rich. Washington state voters are weighing a "millionaires tax" - a 9.9% tax on income over $1m a year. Wealth taxes were once common in Europe but now exist in only three countries: Spain, Norway, and Switzerland, says Dr Kristian Niemietz, head of political economy at the Institute of Economic Affairs. He believes they're "more trouble than they are worth," citing administrative headaches, suppressed investment, capital flight, and meager revenue. In Norway, a wealth tax increase led to more super-wealthy people leaving in 2022 than in the previous 13 years combined, per a local news organisation. A Swiss study found a 0.1 percentage point increase in a wealth tax reduced taxable wealth by 3.5%.
If approved, the California measure would apply retroactively to those with a net worth of at least $1bn who resided in the state as of 1 January 2026. At least six of the state's 200-plus billionaires have reportedly already left to dodge it, including 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 lived in California his whole life, told Forbes he left for Nevada because of the 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, adding it made him feel not "wanted."
Mark Zuckerberg told Meta's board last month he was thinking of moving his primary residence out of California over the tax. To keep him - and the company, headquartered there - Meta agreed to a new stock deal giving Zuckerberg, whose wealth exceeds $200bn, more shares to offset the billions he'd owe if the measure passes in November. Estimates put his potential bill at $12.5bn. DoorDash cofounder Andy Fang, worth an estimated $1.6bn, called the measure "stupid" on X and wrote that "proposals like this make it irresponsible for me not to plan leaving the state."
Not every billionaire is fleeing. Businessman Tom Steyer, who ran an unsuccessful bid for governor this year, said he'd vote in favour, calling the measure's drafting "problematic" but necessary to protect vulnerable Californians. Huang echoed the sentiment: "I don't mind paying taxes. The more you make, the more taxes you pay. I'm okay with that," he told CBS, the BBC's US partner. "I am the ultimate American Dream." Senator Bernie Sanders of Vermont has campaigned for Prop 40, telling a Los Angeles rally that billionaires "believe, like the monarchs of the 19th Century, that they have a God-given right to rule." He added: "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."
Income inequality in the US is at its highest in over three decades, with the top 1% of households owning nearly 32% of all US wealth in the third quarter of 2025 - and California is near historic highs too. A statewide survey from the Public Policy Institute of California found 72% of Californians believe the rich-poor gap is widening, and a similar share say the state should do more about it. Trebbi attributes the momentum to "anti-elite, anti-system sentiment." "This is really not about Prop 40," he says, but about trying to "re-balance the scale a little bit."