California May Tax Billionaires’ Wealth

California could lead the nation by taxing the wealth of billionaires under a new ballot measure called Proposition 40. The proposal has sparked intense debate and is part of one of the most expensive political fights in state history. Billionaires are trying to decide if they will pay the tax or leave California.

Proposition 40 would collect a one-time 5% tax from Californians worth over $1 billion. Most of the money raised would help replace cuts to federal healthcare funding. Supporters, including labor unions, argue it’s needed to protect healthcare services. They say the state could lose $100 billion in federal funds for healthcare over five years.

However, opponents like Governor Gavin Newsom warn that wealthy people might leave California if the tax passes. Tech moguls and venture capitalists have raised millions to fight against the measure. Some billionaires, like Google co-founders Sergey Brin and Larry Page, are already reducing ties with California. Mark Zuckerberg has made a deal to stay while paying the tax without losing control of Meta.

Some Democratic allies also oppose the tax, worried about how the money will be used and the impact on the state budget if wealthy people leave. A recent poll showed 52% of likely voters would vote “no” and 46% would vote “yes,” a shift from earlier when support was higher.

Even if Proposition 40 passes, it could be blocked by other measures on the ballot that aim to stop new taxes on financial assets. These are supported by groups like Building a Better California, which has raised over $333 million, much of it from Brin.

Progressive leaders like Bernie Sanders and Elizabeth Warren support a federal wealth tax but disagree with Newsom on whether California should implement its own version. If Proposition 40 fails, it will still start a important conversation about taxing the wealthy.

Lorena Gonzalez, head of SEIU United Healthcare Workers West, sees Proposition 40 as a step toward challenging billionaires and setting an example for other states.