California Billionaire Tax Heads to Voters as Top 10 Face $31.5 Billion Bill

California voters will decide on Tuesday, Nov. 3, whether the state’s richest residents should hand over 5% of their net worth in a single, one-time levy. With three days to go, a new Forbes analysis puts a price tag on the measure for the state’s ten wealthiest people alone: about $31.5 billion combined. At the same time, economists are still sharply divided on whether Proposition 40 would leave California richer or poorer over time.

What Proposition 40 Would Do

According to Fortune’s reporting, Prop 40 would impose a one-time 5% tax on the net worth of the few hundred billionaires who were California residents on Jan. 1, 2026. The bill would come due in 2027, and taxpayers who choose to spread payments over five years would pay more. Real estate, pensions and most retirement accounts would generally be excluded from the calculation.

Supporters, led by the union SEIU–United Healthcare Workers West, say the tax could raise $100 billion, with 90% of the proceeds earmarked for health care. The union has framed the measure as a way to keep California’s health care system from collapsing.

Who Would Pay the Most

Forbes estimated the bills for California’s ten richest people using its Real-Time Billionaires valuations as of Oct. 27, minus real estate holdings that the tax would not count. By that math, Meta CEO Mark Zuckerberg would owe the most, roughly $10.9 billion. Forbes reports he is staying in the state under an arrangement with Meta’s board that created a new class of stock he can sell to cover the bill.

Nvidia CEO Jensen Huang comes next at an estimated $9.5 billion, and he has publicly backed the tax, calling the ability to pay it a privilege. Former Google CEO Eric Schmidt, at an estimated $1.8 billion, is one of the measure’s most prominent opponents. The rest of the top ten include Broadcom cofounder Henry Samueli (about $1.6 billion), Ubiquiti founder Robert Pera (about $1.5 billion), Kingston Technology cofounders John Tu and David Sun (about $1.4 billion each), OpenAI president Greg Brockman (about $1.3 billion), Figure founder Brett Adcock (about $1.2 billion) and venture capitalist John Doerr (about $1.1 billion).

Forbes cautions that its figures are estimates. The state would value assets differently, particularly private companies and certain trusts, so actual bills could land higher or lower.

The Revenue Fight: $100 Billion or a $39 Billion Hole?

The biggest question for the state budget is how much money the tax would actually bring in. Stanford-affiliated economists Benjamin Jaros and Joshua Rauh of the Hoover Institution, in a National Bureau of Economic Research working paper, estimate collections of about $30 billion, within a range of $28 billion to $36 billion. That is less than a third of what supporters project.

Their core argument is that billionaires can move. The researchers estimate departures have already erased nearly 30% of the potential tax base, and CBS News, citing the study, reported that seven billionaires who publicly left California account for roughly $540 billion in wealth. Looking further out, they project California could lose $1 billion to $3.5 billion a year in income tax revenue from departures. If those losses persist, the authors calculate the state would end up $38.9 billion worse off in today’s dollars, and 85% of their 100,000 simulations produced a net loss.

Other economists see it very differently. A separate NBER study by Jasper Boll, Emmanuel Saez and Gabriel Zucman found that even if every billionaire left permanently, it would take roughly 25 years of lost income taxes to match a $100 billion windfall. They estimate California billionaires paid $4.3 billion in state income tax in 2025, and they argue it is inconsistent to treat the tax as one-time while treating the migration it triggers as permanent. Saez advised on the measure’s design without pay.

California’s nonpartisan Legislative Analyst’s Office sits between the two camps. It expects the tax to raise tens of billions of dollars over several years while potentially reducing annual income tax revenue by less than $1 billion.

Residency adds another wrinkle. Because the tax is tied to residency on Jan. 1, 2026, announcing a move does not by itself establish that someone escapes it. Economists who helped design the measure argue some high-profile departures, including Google cofounder Sergey Brin, likely remained California tax residents on that date.

A $340 Million Political Battle

The campaign has become one of the most expensive ballot fights in the country. Fortune, citing the Guardian’s review of campaign finance filings, reports that tech billionaires have raised more than $340 million to oppose Prop 40 and back related initiatives, with Brin giving more than $100 million. Forbes, citing New York Times figures, reports Doerr has spent about $40 million opposing the tax, and Schmidt has given about $40 million to a PAC fighting it.

Gov. Gavin Newsom also opposes the tax and on Oct. 9 endorsed Proposition 42, a Brin-funded countermeasure that would bar retroactive taxes and ban new state taxes on personal property. Prop 42 and a second measure, Proposition 41, could each nullify the billionaire tax if either receives more yes votes than Prop 40. Voters look split: a recent Citrin Center–Politico poll found 46% of likely voters in favor and 43% opposed.

Why It Matters for Business and Wealth Planning

Even though Prop 40 targets only a few hundred people, its outcome matters well beyond them. First, it is a live test of whether a U.S. state can tax wealth rather than income. If it passes and survives the expected legal challenges, other high-tax states facing budget pressure will study the model closely. If it fails, or is wiped out by a competing measure, that will become the opposition’s main argument everywhere else.

Second, the measure could move markets in specific stocks. Founders who hold most of their wealth in company shares may need to sell stock or borrow against it to raise cash, and arrangements like the new share class Forbes describes at Meta show how boards may restructure equity to keep founders liquid and in place.

Third, residency planning is now a front-line issue for family offices and wealth advisers. The gap between the Stanford and Berkeley forecasts largely comes down to one question: how many wealthy taxpayers leave, and do they stay gone? Advisers serving founders, executives and business owners in California and other high-tax states should expect more clients asking about domicile, trusts and the timing of liquidity events, whatever the result on Tuesday.

Finally, the debate is unfolding as wealth concentration hits new highs. Federal Reserve data cited by Fortune show the richest 1% of U.S. households held a record 32.5% of national net worth in the second quarter of 2026, up from 31.1% a year earlier, while the bottom half held just 2.3%. That backdrop is likely to keep wealth taxes on the agenda, as shown by Newsom’s own proposal for a national minimum tax on Americans worth more than $100 million.

The Bottom Line

Prop 40 asks voters to make a bet with very uncertain odds. Supporters see up to $100 billion for health care, critics see a long-term revenue loss, and the state’s own analysts expect something in between. Even if the measure passes on Nov. 3, competing ballot measures and court challenges could keep it from taking effect, and it may take years to know whether the tax helped or hurt California’s finances. For business owners and investors, the safest approach is to treat this as the start of a broader wealth-tax debate, not the end of one.

Edited by Coron @QUE.COM
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