California’s billionaire tax goes to the voters

CULTURE · WEALTH

Great fortunes rarely wait for a law to pass before they move. In California, a proposed one-time tax of 5% on net worth above $1 billion began reshaping the map of American wealth months before a single vote was cast, and on 3 November 2026 it finally reaches the ballot as Proposition 40.

The measure, sponsored by the healthcare workers’ union SEIU-UHW and built on research associated with the economists Emmanuel Saez and Gabriel Zucman, applies to billionaires who were resident in the state on 1 January 2026. Around two hundred people fall within its reach. Its backers estimate a yield of roughly $100 billion, earmarked for public health care, food assistance and education.

A deadline that emptied a few mansions

The residency date did what residency dates do. At least six billionaires were reported to have left California before or around 1 January, among them the PayPal co-founder Peter Thiel, who moved his base to Florida, the Google founders Larry Page and Sergey Brin, and the Uber co-founder Travis Kalanick. Advisers who specialise in relocating very wealthy families describe a quieter second wave behind the headline names, waiting to see how the vote falls.

Not everyone has packed. Jensen Huang, the chief executive of Nvidia, who would owe something in the region of $8 billion, has said he is untroubled by the measure. His argument is simple: those who chose to build their lives in Silicon Valley accept the taxes that come with it.

The arithmetic of departure

The measure qualified in June, certified with more than 980,000 valid signatures, after Governor Gavin Newsom rejected the union’s offer to withdraw it in exchange for a smaller legislated levy. Newsom opposes the tax, which he has called damaging to the state. His concern is shared by those who point out that California’s budget leans heavily on income tax paid by its richest residents: if enough of them leave, the state may collect a one-off windfall and lose a recurring stream. The Legislative Analyst’s Office has warned of exactly that trade, a temporary gain of up to tens of billions of dollars set against ongoing income tax losses that could run to hundreds of millions a year.

Three propositions, one outcome

The final weeks of the campaign have turned into a contest of ballot engineering. Two competing measures, Propositions 41 and 42, are backed by Building a Better California, a group founded by Sergey Brin and the former Google chief executive Eric Schmidt. One would subject new taxes to the state’s spending limit; the other would bar taxes on financial assets and most personal property. Each is written so that, if it passes with more votes than Proposition 40, the billionaire tax falls even if voters approve it. Proposition 40 carries the mirror clause.

Polling has narrowed through the year. A Public Policy Institute of California survey in early September showed 52% in favour and 46% against, with both rival measures also above 50%. A Berkeley poll in October put support at 45% against 43% opposed, with the rest undecided.

A global migration of capital

California is not alone in testing how far the very rich will travel to escape a bill. Britain abolished its non-domiciled regime in April 2025, after announcing the change the year before, and watched a steady stream of residents leave for Milan, Dubai and Monaco. Italy, offering a fixed annual payment in place of tax on foreign income, has been one of the quiet beneficiaries. The pattern is consistent: wealth is mobile, and it reads the fine print early.

Whatever California decides on 3 November, the most telling vote has already been cast, not at the ballot box but at the removal van. In the world of extreme capital, a proposal is often enough to change an address.

GABRIEL SILVEIRADO, FOR WAYFARER.