California Voters Decide on Billionaire Wealth Tax Proposition 40

California voters will decide on November 3 whether to approve Proposition 40, a one-time 5% tax on billionaires who resided in the state as of January 1, 2026. Initiated by a healthcare union, the measure seeks to raise approximately $110 billion to replace Medicaid funding eliminated by the One Big Beautiful Bill Act. However, economists from Stanford University suggest the actual revenue may be closer to $30 billion, potentially resulting in a net loss of $39 billion in future income tax revenue due to wealth flight.

Travis Kalanick, cofounder of Uber, relocated to Austin, Texas, on December 18, 2025, to avoid a potential $180 million tax bill. Kalanick is among several billionaires who left the state before the deadline, a trend that a Stanford University working paper estimates removed $540 billion in taxable wealth. In response to the potential tax, Meta reversed a previous agreement to allow CEO Mark Zuckerberg to sell shares to encourage him to remain in California.

Opposition to the measure is led by Governor Gavin Newsom and candidate Xavier Becerra, who cite fears of a billionaire exodus. Google co-founder Sergey Brin has coordinated $200 million to oppose Proposition 40 and promote Propositions 41 and 42, which would bar retroactive taxes and new taxes on financial assets. Grover Norquist of Americans for Tax Reform argues the tax is a desperate attempt to fund out-of-control state spending.