California, home to over 250 billionaires with a combined net worth exceeding 2 trillion USD, boasts more billionaires than any other U.S. state, according to Forbes. It is also the headquarters for leading companies such as Google, Apple, Meta, and Nvidia.

Consequently, the state is a focal point for discussions on policies to tax the super-rich. California's Proposition 40 proposes a one-time 5% tax on individuals with a net worth over 1 billion USD who reside in the state as of 1/1/2026. California residents will vote on this proposition on November 3.

Recent surveys, however, indicate diminishing public support for the bill. A poll conducted in August by the Institute of Governmental Studies (IGS) at the University of California, Berkeley, found that 48% of likely voters supported the proposition, while 41% opposed it.

A September poll by the Public Policy Institute of California reported similar figures: 52% in favor and 46% against. Compared to the national average, support for taxing billionaires in California is lower. An August Reuters/Ipsos poll revealed that 64% of U.S. voters nationwide supported higher taxes, overwhelmingly outweighing the 15% who opposed them.

Historically in California, ballot initiatives typically require high initial support to pass. Political analysts suggest that undecided voters often lean towards a "no" vote when they reach the polls.

"California ballot initiatives tend to lose support over time. If the support rate in August is below 50%, that is not a good sign," commented John Pitney, a professor of politics at Claremont McKenna University.

Proponents argue that California's Proposition 40 would generate 100 billion USD in funding for healthcare, food, and education. Emmanuel Saez, an economics professor at the University of California, Berkeley, who helped draft Proposition 40, stated that billionaires are no longer as popular as they once were.

"They have enormous wealth, enormous power," he said, emphasizing the need to tax billionaires to fund public healthcare costs. Union President Dave Regan in the state expressed his "full support for the proposal," adding that opponents are "out of touch with reality."

Skeptics, however, estimate the revenue generated would only be around 40 billion USD. They also warn that the policy could prompt some billionaires to leave the state, causing California to lose tax revenue and long-term investment.

A view of San Francisco, California, U.S. Photo: Pexels

According to AP, many technology billionaires in Silicon Valley oppose the tax, having already moved assets to other states or threatening to do so. They have also spent millions of USD to prevent the proposal from passing. Notably, Google Co-founder Sergey Brin has spent over 100 million USD to block Proposition 40 and support counter-proposals during the same election cycle.

Governor Gavin Newsom also opposes the measure, arguing it is merely a temporary fix for a chronic issue. He advocates for a federal wealth tax to prevent the ultra-rich from relocating.

In mid-July, a coalition of organizations across healthcare, education, and housing sectors, including the California Medical Association and the California School Boards Association, united to oppose Proposition 40.

"This risky wealth tax directly threatens essential funding for education, healthcare, public safety, and infrastructure projects by making California's revenue even more volatile," the coalition stated in a declaration.

Brian Brokaw, a political advisor to Governor Newsom and leader of a committee campaigning against the tax, believes the proposal will "exacerbate California's greatest challenges." He stated, "Trading sustainable tax revenue for one-time money is bad policy and detrimental to the 40 million California residents who will ultimately bear the consequences."

Globally, European nations, including France, Sweden, Finland, Denmark, and Germany, abolished wealth taxes between 1997 and 2018 due to concerns about capital flight, tax avoidance, and economic competitiveness.

Professor Emmanuel Saez dismisses fears that billionaires will leave California, citing the state's concentration of quality universities, research activities, infrastructure, and abundant talent. "It is absurd to suggest that Silicon Valley will stagnate simply because of a tax on billionaires' assets," he asserted.

Phi An (according to Reuters, AP)