California voters head to the polls November 3 to decide whether to impose America's first-ever wealth tax on billionaires, and the measure's own supporters are already watching the revenue projections shrink as some of the state's wealthiest residents pack up and leave town.
Proposition 40 would impose a one-time 5% tax on the assets of taxpayers and trusts holding more than $1 billion, payable over five years. Covered assets include businesses, securities, art, collectibles and intellectual property. Real property, pensions and certain retirement accounts would be exempt. As drafted, the tax would apply retroactively to anyone who was a California resident as of January 1, 2026.
The revenue is earmarked for state healthcare programs, public education and food assistance. Proponents estimate it would bring in roughly $100 billion from the $2.3 trillion in wealth held by California billionaires as of mid-2026.
But the threat of the tax has already triggered departures. Google co-founders Larry Page and Sergey Brin, Oracle founder Larry Ellison and PayPal co-founder Peter Thiel have moved out of California or relocated businesses, according to Fox Business. Max Levchin, the billionaire co-founder of Affirm Holdings, told Bloomberg on Monday he would "probably" leave California if voters pass the wealth tax.
"But the notion of the popular opinion saying 'Actually, we're totally OK with asset seizure because we just really, really need it,' I just think that is so wrong."
On Fox Business, gubernatorial candidate Steve Hilton and California Business Roundtable President Robert Lapsley warned the measure could drive jobs out of the state.
Economists are split on the math. UC Berkeley economist Gabriel Zucman, who helped design national wealth tax proposals for Senators Elizabeth Warren and Bernie Sanders, co-authored an analysis estimating Prop 40 could raise about $100 billion. Zucman told NPR he believes the measure would be "the beginning of not only a broader U.S.-wide movement, ultimately paving the way for a federal wealth tax — but I think it will be the beginning of an international movement."
On the other side, Stanford economist and Hoover Institution senior fellow Joshua Rauh, along with co-author Benjamin Jaros, concluded the tax could lead to an exodus of billionaires, damage the state's economy and blow a hole in the income tax revenue California already collects from them. A recent analysis cited by Fox Business suggests the tax could permanently shrink the state's tax base over the long term, with losses exceeding near-term revenue gains.
NPR noted the measure's precedent: in 1978, California voters approved Proposition 13, a historic tax revolt that became an opening salvo in the Reagan revolution and its national movement to slash taxes. Prop 40 would be its opposite — a test case for taxing the superrich that both sides see as a preview of a coming national fight.
Even California Democrats are divided on the measure, according to The Hill, as wealthy Californians organize against it and questions multiply about how the tax would actually be collected and what it would yield.
For everyday Californians, the stakes are concrete. If the revenue projections collapse, the programs Prop 40 promises to fund don't get funded — and the income tax revenue the state already collects from billionaires could shrink along with the tax base. The state's business climate, already under scrutiny, faces another test as employers watch whether Sacramento treats wealth as a resource to attract or a target to seize.
Our Take
Here's the tell: the people who wrote Prop 40 promised $100 billion, and the billionaires are already gone. Larry Page, Sergey Brin, Larry Ellison, Peter Thiel — these aren't tourists. They built companies in California, and they left before the vote even happened. When the tax collectors have to chase the tax base out the door, the math doesn't work, and the people who get stuck holding the bill are the ones who stayed.
Zucman's own words give the game away. This was never about funding healthcare and schools in California. It's a pilot program for a federal wealth tax, and California voters are the test subjects. The Left wants to prove that asset seizure works, and if the revenue falls short, they'll blame the billionaires for leaving rather than the policy for driving them out.
Meanwhile, California Democrats can't even agree among themselves. When your own party is split and your economists are dueling, that's not a mandate — that's a gamble with other people's money.
On November 3, Californians get to answer one question: do you want your state to be a place that attracts wealth and jobs, or a place that punishes them until they leave? The billionaires have already voted — with their private jets.
