Proposed wealth tax: Will California billionaires flee?

Some California billionaires have already relocated as Proposition 40—a one-time 5% wealth tax on nearly 250 ultra-rich residents—heads to the November ballot. Opponents warn of wider flight and budget strain; supporters say capital flight is overstated and residency rules limit escape. Voters remain closely split. The clash over every California billionaire fortune is now a full campaign war.

Key Takeaways

• Proposition 40 would levy a one-time 5% tax on assets of nearly 250 California billionaires, with about 90% of revenue for healthcare.
• Google co-founder Sergey Brin has put roughly $102 million into Building a Better California and relocated to Nevada’s Lake Tahoe side.
• Former Google CEO Eric Schmidt, who gave more than $3 million, is reportedly at odds with Brin over how opposition funds are spent.
• Supporters including Rep. Ro Khanna call a one-time wealth tax progressive and patriotic; Gov. Gavin Newsom warns it could hurt the economy.
• California’s Chamber of Commerce estimates 1% of residents pay nearly half of personal income taxes, raising stakes if the ultra-rich leave.

What is California’s proposed billionaire wealth tax?

In November, Californians will vote on Proposition 40, a first-of-its-kind state wealth tax. According to NPR, it would impose a one-time 5% levy on the assets of nearly 250 billionaires living in the state.

SEIU United Healthcare Workers West president Dave Regan says the measure is meant to backfill federal healthcare funding cuts tied to the 2025 tax-and-spending law. If passed, about 90% of revenue would fund healthcare and 10% food assistance and public education.

Regan argues California’s roughly 250 billionaires hold about $2.4 trillion—wealth on a scale he compares to the annual income of all non-billionaire Californians. The Legislative Analyst’s Office, cited by Fortune, says the tax could hit a few hundred people and raise tens of billions of dollars.

Will billionaires really leave California over the tax?

That is the core fight. Opponents say a mass exit would hammer a budget that already leans on the rich: the Chamber of Commerce estimates 1% of residents pay nearly 50% of personal income taxes.

Brin has moved to the Nevada side of Lake Tahoe and poured about $102 million into Building a Better California, which he co-founded with Schmidt. Bloomberg estimates the tax could cost Brin around $13 billion. Brin told The New York Times he fled Soviet socialism and does not want California to end up in the same place.

Regan calls the move political theater, noting the tax would apply to residents as of January 2026—so leaving later would not erase liability. Economist Thomas Piketty has argued “capital flight” is often overstated; Cato’s Adam Michel says a tax this large could push out not only current billionaires but anyone who expects to be taxed next.

For more oddball money-and-power stories, see Bizarre News & Florida Man on BlasterPost.

Why are Google’s Schmidt and Brin fighting on the same side?

Fortune reports Schmidt and Brin both bankroll the anti–Prop 40 coalition, but diverge on strategy. Brin supplied more than $100 million; Schmidt more than $3 million. Other donors include John Doerr ($7.5 million), Chris Larsen ($10 million), and Patrick Collison ($7 million).

A Schmidt adviser told Fortune his “only current involvement in politics is his contributions to defeating the billionaires tax,” after funds also backed measures such as Proposition 45. Props 41 and 42—aimed at audits and barring retroactive taxes—still face voters even after California Democrats endorsed Prop 40 and opposed the counter-measures.

Rep. Ro Khanna and Sen. Bernie Sanders champion the tax; Khanna frames a one-time wealth tax as progressive and patriotic. Newsom and groups such as the California Medical Association call it an unstable short-term fix. Some polls show Californians nearly evenly split—so whether any more billionaire households pack up may hinge on what voters decide in November.