- Californians are debating how to tax their ultra-rich neighbors. Silicon Valley is sweating it.
- It could bring in $100 billion to plug a coming Medicare hole — or lose billions in tax revenue.
- The debate has created fresh political and tech exec divides.
Tune in to the latest episode of "How to Tax a Billionaire: California Edition" — it's filled with drama, tech celebrities, and there's a big pot of money at stake!
Today, Californians are heading to the polls, where they'll be asked to answer "Yes" or "No" to Proposition 40, which would impose a one-time "5% tax on certain taxpayers with assets over $1 billion."
The vote has started a showdown that's been shaking up Silicon Valley executives for months.
Google cofounder Sergey Brin, former Google CEO Eric Schmidt, Affirm CEO Max Levchin, Stripe CEO Patrick Collison, DoorDash CEO Tony Xu, Kleiner Perkins Chairman John Doerr, and angel investor Chris Larsen have collectively poured millions into an opposition campaign. Brin himself has donated more than $100 million to the "No" team, per Cal Matters.
State campaign-finance filings show committees opposing Prop. 40 had reported about $130 million in contributions through October 22, versus about $33 million for its supporters.
Meanwhile, other tech executives are preparing, just in case they have to pay up.
Meta CEO Mark Zuckerberg weighed moving out of the state. In October, the company created a new class of shares that would give Zuckerberg $20 billion in "immediate liquidity" if the vote passes — potentially allowing him to pay the tax without giving up some of his voting power.
"I've got to tell you, I have not even thought about it once," Jensen Huang, CEO of Nvidia, said during a January spot on Bloomberg TV. "We chose to live in Silicon Valley, and whatever taxes they would like to apply, so be it. I'm perfectly fine with it."
The vote has also split some regular political alliances. Progressive Vermont Sen. Bernie Sanders has backed the billionaire tax, while California's Democratic governor, Gavin Newsom, opposes the measure.
There are multiple paths to "No"
If a majority of voters fill in the "Yes" bubble on Prop 40, roughly 200 people who were California residents on January 1, 2026, could face the one-time tax.
That vote has two lurking trap doors — propositions 41 and 42 could ruin the "Yes" team's finale.
Both countermeasures were designed to undercut Prop. 40 by imposing new auditor reviews and prohibiting taxes on certain assets.
If either measure receives more yes votes than Prop. 40, the billionaire tax could be stopped from taking effect, even if a majority of Californians vote for it.
What California's billionaires could owe
In broad terms, the measure would tax billionaires based on more than their salary.
Taxable wealth would include ownership stakes in businesses, securities, investment accounts, art, collectibles, and intellectual property, among other assets. Real estate, pensions, and retirement accounts would generally be excluded.
If the billionaire tax passes, it'll be due in 2027 — though taxpayers could spread out their payments across five years at a higher cost.
Supporters say the measure could raise tens of billions of dollars over several years. A majority of the proceeds would go toward healthcare, with the remainder allocated to education, food assistance, and the operation of the tax program. The campaign has pitched the measure as a way to help backfill looming federal cuts to Medi-Cal.
Overall, Prop. 40 backers have said the tax event would raise over $100 billion for the state.
A National Bureau of Economic Research working paper from Stanford economists, published in October, warned that the results could be much less rosy. The initial tax event could bring in around $30 billion before prompting high-earning executives to leave the state, the paper said. That could lose California $38.9 billion over time, the paper warned.
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