California Voters Weigh Landmark 'Billionaire Tax'
A proposed 5% tax on the net worth of the state's wealthiest residents could fund healthcare improvements, but faces opposition over concerns of capital flight.
California voters are set to decide on a first-of-its-kind measure that would impose a one-time 5% tax on the net worth of the state's billionaires. Proposition 40, if approved, aims to raise an estimated $100 billion to address federal funding cuts to the state's healthcare system.
The initiative targets California's more than 200 billionaires, including prominent figures like Mark Zuckerberg and Kim Kardashian. Proponents argue the tax is necessary to ensure the ultra-wealthy contribute their fair share and to prevent a collapse of the healthcare system due to reduced federal funding. Suzanne Jimenez, chief of staff for Service Employees International Union-United Healthcare Workers West, described the measure as a "short-term solution" needed while longer-term funding strategies are developed.
California, which boasts the largest state economy in the US and the fourth largest globally, has a high concentration of billionaires but also struggles with significant wealth disparity and a large homeless population. Supporters believe the tax could help rebalance the scales.
However, the proposition has drawn significant opposition. Governor Gavin Newsom has expressed concerns that the tax could prompt wealthy residents to leave the state, taking their substantial income tax contributions with them. Google co-founder Sergey Brin has reportedly contributed over $100 million to efforts opposing the measure. Several billionaires, including Larry Page, Peter Thiel, Travis Kalanick, and Don Hankey, are said to have relocated from California in anticipation of the tax.
Don Hankey, who moved to Nevada, stated that the proposition made him feel "a little bit like I wasn't wanted," despite his business contributions to the state. Mark Zuckerberg has also reportedly considered leaving California over the proposed tax, with Meta subsequently agreeing to a new stock deal to offset potential losses.
Nvidia CEO Jensen Huang is among the billionaires who have publicly supported the tax, stating, "I don't mind paying taxes. The more you make, the more taxes you pay. I'm okay with that."