Full Breakdown
California’s Proposition 40 Billionaire Wealth Tax and the Billionaire-Backed Opposition
By Drooid · · How we work
Proposition 40: The Proposed Tax
Proposition 40 would impose a one-time 5 % wealth tax on California residents whose net worth exceeded $1 billion as of Jan. 1, 2026. The tax would be calculated on the Dec. 31, 2025 valuation of assets and payable over five years. Economists Jasper Boll, Emmanuel Saez and Gabriel Zucman estimate the 260 California billionaires subject to the levy would collectively owe at least $107 billion—roughly 5 % of their combined Forbes-estimated wealth. Spread across the state’s 39 million residents, that amount translates to about $2,700 per person, while the median household net worth in California was $303,000 in 2023 (Public Policy Institute of California).
Billionaire Opposition Funding
A Times analysis of campaign filings shows that 30 billionaires or their spouses—about one in eight of those potentially taxed—have contributed $293 million to oppose Proposition 40 and to back competing measures (Propositions 41, 42, 43) that would nullify the tax if passed. Google co-founder Sergey Brin alone donated $102 million, more than a third of the total billionaire opposition money, yet this represents less than 1 % of his estimated tax liability. Other contributors include Peter Thiel ($3 million), Eric Schmidt (nearly $2.6 million), Kim DeGeorge ($1.9 million), Chris Larsen ($750,000) and Douglas Leone and his spouse ($500,000). The California Business Roundtable’s political action committee also receives billionaire support for its anti-tax campaign.
Official Positions and Expected Impact
Governor Gavin Newsom opposes a California-only wealth tax, urging a national approach instead. Democratic candidate Xavier Becerra and Republican contender Steve Hilton, both running to replace Newsom, have publicly criticized the measure. Labor and health-care groups—including the Service Employees International Union, the California Teachers Association, the California Medical Association and Planned Parenthood Affiliates of California—back the tax, citing potential funding for Medi-Cal. Researchers at the Hoover Institution project that actual state revenue could be nearer $40 billion, factoring in billionaire residency moves before and after Jan. 1, 2026. Executive director Chris Hoene of the California Budget and Policy Center notes that the tax’s design excludes real property, pensions and retirement accounts, focusing assessment on publicly available stock data and private valuations of assets such as artwork and jewelry.
Verbatim Quote
“The reality is the income tax loss can never get anywhere near the scale of what the wealth tax gain would be,” — Chris Hoene, executive director at the California Budget and Policy Center, a nonpartisan group