California Wants a One-Time 5% Tax on Its Billionaires. Sergey Brin Is Spending $100 Million to Stop It.

California's Proposition 40, on the ballot this fall, would impose a one-time wealth tax of 5 percent on any resident worth more than $1 billion. The state has roughly 250 billionaires, with a combined net worth of about $2.3 trillion, and supporters estimate the measure could raise as much as $100 billion.

The case for it rests heavily on a gap in how that wealth has been taxed so far. Between 2019 and 2025, California's billionaires saw their combined net worth grow by roughly $1.4 trillion, while the state income taxes they paid amounted to only 1.6 percent of that gain. The pool of people the measure would apply to is also likely to keep growing: SpaceX went public in June, and both Anthropic and OpenAI are reportedly preparing their own IPOs, moves that tend to mint new billionaires rather than remove them from the rolls.

The measure has drawn an unusually academic show of support. Six Nobel Prize-winning economists, Daron Acemoglu, Abhijit Banerjee, Peter Diamond, Esther Duflo, Paul Krugman, and Joseph Stiglitz, have endorsed it, alongside the Service Employees International Union-United Healthcare Workers West. Some of the people it would tax have backed it too: Nvidia CEO Jensen Huang has said he's "perfectly fine" with it. Rep. Ro Khanna has also supported the measure, though he has drawn a line against taxing illiquid stakes or voting shares specifically.

Opposition has been just as high-profile. Governor Gavin Newsom has come out against Prop 40, and Google cofounder Sergey Brin has put more than $100 million into the campaign to defeat it, a sum that alone approaches what a single newly minted billionaire would owe under the tax's minimum threshold.

Two other measures on the same ballot complicate the fight. Proposition 41 would subject new taxes to spending limits and polls at 51 percent support to 44 percent opposed; Proposition 42 would prohibit taxes on financial assets and personal property outright, polling at 54 percent to 43 percent. Prop 40 itself sits at 52 percent support to 46 percent opposed, according to a September survey from the Public Policy Institute of California, a real but narrow lead heading into the vote.

The economists backing Prop 40 have been explicit that they don't see it as a one-state idea. In their endorsement, they said the goal was to "kickstart a movement to tax ultra-high-net-worth individuals in other states, and eventually at the federal level and in other countries." They also pointed to California's continued economic pull as a rebuttal to the usual argument that wealth taxes chase capital away, noting the state has attracted roughly 80 percent of new U.S. venture capital funding since early 2026, tax fight notwithstanding.