No state may be a more natural fit for a tax on billionaires than California. The state leans left politically, needs funds for healthcare and is home to as many as 250 billionaires collectively worth upwards of $2 trillion. But the Nov. 3 ballot initiative Proposition 40, which asks Californians whether to impose a one-time five per cent tax on the state’s billionaires, is far from certain to pass, political analysts say, amid a debate that has raised questions about income inequality and the state’s future business prospects. Whether and how to tax the ultrawealthy are questions that extend well beyond the Hollywood Hills and Silicon Valley. New York City Mayor Zohran Mamdani, a Democrat and democratic socialist, filmed a video in front of billionaire investor Ken Griffin’s penthouse as part of an ultimately successful campaign to tax high-end second homes in the city. Even a majority of Republicans see billionaires as creating unfairness and contributing to economic woes, one 2025 poll showed. A Reuters/Ipsos poll in August found 64 per cent of independent registered voters in the six-day nationwide poll said they support increasing taxes on corporations and billionaires, compared to 15 per cent who oppose the idea. “Billionaires are no longer very popular,” said University of California, Berkeley economics professor Emmanuel Saez, a researcher of wealth inequality who helped write Proposition 40. They have “enormous wealth, enormous power.” Saez describes the proposal as very simply “a tax on billionaires to fund healthcare.” California has more billionaires than any other state, according to a Forbes estimate last year, and is home to some of the country’s most valuable companies, including tech giants Google GOOGL.O, Apple AAPL.O, Meta META.O and Nvidia NVDA.O. Polls show it ahead - for now A UC Berkeley IGS Poll in August found 48 per cent of likely voters supported Proposition 40, with 41 per cent opposed, while a September Public Policy Institute of California poll showed it leading 52 per cent to 46 per cent. California ballot measures typically need robust early support to survive Election Day. Undecided voters are more apt to vote “no” when the time comes, political analysts say, and opponents have yet to crank up their advertising campaign. “California ballot measures tend to lose support over time, and if it’s polling below 50 per cent in August, that’s not a good sign for its prospects,” said John Pitney, a professor of politics at Claremont McKenna College. Backers say California’s measure would generate $100 billion for healthcare, food assistance and education. But skeptics peg the revenue estimate at closer to $40 billion and say it could also drive some billionaires out of state, depriving California of future tax revenue and investment. Opposition has been bolstered by billionaires such as Sergey Brin, the Google co-founder who has spent more than $100 million to defeat Proposition 40 and support countermeasures on the same ballot that would effectively void it. “I fled socialism with my family in 1979 and know the devastating, oppressive society it created in the Soviet Union. I don’t want California to end up in the same place,” Brin, 53, whose family left the Soviet Union when he was a child, told the New York Times. Governor Gavin Newsom, a Democrat widely believed to be running for president in 2028, also opposes Proposition 40, instead advocating for a nationwide federal wealth tax. Colourful initiative history California ballot initiatives draw unusual attention because the state combines a powerful direct-democracy system with the nation’s largest state economy and population. The process allows citizens to propose laws, though most initiatives are drafted by interest groups or lawyers. Proposition 13 in 1978, which capped and rolled back property taxes, became a national symbol of a tax revolt that shaped US politics. But California voters have only approved one in three citizen initiatives historically. In 2022, another California ballot measure aimed at increasing taxes on top earners, Proposition 30, lost 58 per cent to 42 per cent, even though Democrats outnumber Republicans nearly two to one. “Sixty percent of Californians now reliably vote Democratic for statewide races, but that doesn’t mean that they’re really liberal on taxing, spending, or even many social issues,” said Thad Kousser, a professor of political science at UC San Diego. European countries including France, Sweden, Finland, Denmark and Germany repealed wealth taxes between 1997 and 2018 amid concerns about capital flight, avoidance and economic competitiveness. The California proposition is retroactive to Jan. 1, limiting billionaires’ ability to escape the tax by moving. Saez said the tax was unlikely to prompt many billionaires or the tech startups that are making people wealthy to move, because of the quality of California’s universities, research, infrastructure and talent. “It’s just absurd to think that Silicon Valley is going to come to a standstill because of a billionaire wealth tax,” he said. Reporting by Daniel Trotta in Carlsbad, California, and Ann Saphir in San Francisco; editing by Donna Bryson and Nia Williams
