California voters to decide on Proposition 40 billionaire tax on election day

What This is

• Proposition 40 would add a one-time 5% tax on California residents with net worth over $1 billion.
• Independent estimates vary widely, with some economists and a Stanford working paper projecting roughly $28–36 billion or about $30 billion instead of $100 billion.
• The measure has triggered heavy campaign spending, including hundreds of millions of dollars from billionaires and their spouses to defeat it.
• Backers say the tax would raise tens of billions of dollars, with many projections around $100 billion, largely for health care programs such as Medi-Cal and to offset expected federal health funding cuts.
• Opponents argue the tax could push billionaires to change residency, shrinking the tax base and potentially reducing other state revenue such as income tax collections.
• The campaign has produced unusual political alliances, with some prominent Democrats and donors opposing Proposition 40 while unions and progressive figures back it.
• Meta disclosed that CEO Mark Zuckerberg considered leaving California if Proposition 40 passes, and the company approved a new class of non-voting shares to help him raise cash without losing voting control.

Why This Matters

• Proposition 40 is a test of whether states can tax billionaire wealth, not just yearly income.
• The campaign shows how much political power a small number of very rich people can bring to a ballot fight through donations and advertising.
• If the tax base changes through relocations or legal delays, it could shape how California plans budgets and funds health care programs.
• Company responses, like Meta’s stock changes, suggest ballot measures can influence corporate governance and where top executives choose to live.