California Billionaire Tax Faces Voter Test Amid Exodus Warning

November 1, 2026 — California voters are due to decide Proposition 40 on November 3. The measure would impose a one-time 5% tax on billionaires’ wealth, payable over five years, and direct the money to health care, education and food assistance. It would apply to people who were California residents on January 1, 2026, and cover assets including businesses, securities, art and intellectual property.

The tax has become a dispute over whether a major infusion of revenue is worth the risk of driving wealthy taxpayers away. A Stanford analysis found that at least seven billionaires, holding nearly $540 billion in combined wealth, had left or cut ties with the state. Don Hankey, an auto-loan and real estate executive, said he moved to Las Vegas before the residency deadline and criticized the state’s treatment of him and his companies.

Estimates of the measure’s proceeds diverge sharply. University of California, Berkeley, scholars Gabriel Zucman and Emmanuel Saez, with Jasper Boll, estimated it could raise about $100 billion, with limited income-tax losses. Hoover Institution economists Joshua Rauh and Benjamin Jaros put likely collections at $28 billion to $36 billion. They estimated that lost annual income taxes from departing billionaires could outweigh the one-time revenue, producing a net present value of negative $38.9 billion; their simulations found a negative result in about 85% of cases.

Supporters say the tax would make billionaires contribute to health care and other public services. SEIU-UHW president Dave Regan has described it as a five-year measure to help offset federal health care cuts. More than 100 economists signed a letter urging voters to reject it, raising concerns including taxpayer departures, future changes to the tax and valuation of hard-to-price assets.

Opponents are preparing a legal challenge if the measure passes. Two other ballot measures backed by Google co-founder Sergey Brin could invalidate key parts of Proposition 40 if they receive more votes.

Billionaires Should Help Protect California’s Health Care

November 1, 2026 — Proposition 40 asks California voters to make billionaire fortunes contribute to health care, education and food assistance. The one-time 5% tax would be payable over five years. With health care funding at stake, opponents’ warnings about wealthy taxpayers leaving should not obscure the public services the measure is designed to support.

SEIU-UHW president Dave Regan has presented the tax as a temporary way to help fill the gap from federal health care cuts. Supporters argue that billionaires often draw wealth from investments rather than income, leaving room for a wealth tax to raise money even if some people move. University of California, Berkeley, scholars Gabriel Zucman and Emmanuel Saez, with Jasper Boll, estimated collections of about $100 billion and limited effects on income-tax receipts.

Critics point to departures and a lower estimate from Hoover Institution economists Joshua Rauh and Benjamin Jaros, who project $28 billion to $36 billion. They estimate that lost income-tax revenue could outweigh the one-time proceeds. But that forecast is disputed: the Berkeley economists’ analysis reaches a far more favorable conclusion, and supporters say the tax is about making billionaires contribute to a health care system they benefit from.

More than 100 economists have urged voters to reject the measure, citing legal and administrative concerns. Regan has countered that California helped make billionaires enormously wealthy. The vote is November 3; if the measure passes, opponents are preparing a legal challenge, and two other ballot measures could invalidate key parts of it.

California’s Billionaire Tax Risks Losing More Than It Raises

November 1, 2026 — Proposition 40 promises California about $100 billion from a one-time 5% tax on billionaire wealth. But the people targeted by the measure have already begun leaving, and the state could lose recurring income-tax revenue long after a single collection ends. Voters face that risk on November 3.

A Stanford analysis found that at least seven billionaires, with nearly $540 billion in combined wealth, had left or cut ties with California. Hoover Institution researchers Joshua Rauh and Benjamin Jaros project that the tax could collect $28 billion to $36 billion, not $100 billion. They calculate that lost income-tax revenue could exceed the one-time proceeds, with a negative net present value in about 85% of their simulations.

That is the central danger for California’s public finances: a tax aimed at billionaires may drive away taxpayers who contribute income-tax revenue every year. The measure’s retroactive residency date and the difficulty of valuing private businesses and other assets also raise legal and administrative concerns. More than 100 economists have urged voters to reject it, and opponents are preparing a court challenge if it passes.

Supporters, including SEIU-UHW, say the tax would help fund health care and other services, and Berkeley economists estimate it could raise about $100 billion with limited income-tax losses. But that promise depends on a tax base already reduced by departures. California should not treat a disputed one-time windfall as a reliable answer to ongoing funding needs.