Zuckerberg deal highlights the stakes of California billionaire tax

Taxing the super-rich may soon become a reality in the U.S., at least on the state level. On the upcoming Nov. 3 ballot, California’s Proposition 40 will ask voters to enact a one-time 5% wealth tax on California billionaires, with an option to pay the liability in annual installments over five years. The levy would apply to taxpayers' worldwide net worth, excluding directly held real estate, unless owned through the billionaire's corporate business entity.

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Where is it going? The tax is expected to raise about $100B over the years 2027-2031. The vast majority of the revenue will be used for state-funded healthcare programs, which saw heavy cuts due to the One Big Beautiful Bill Act, as well as funding for K-14 public education and food assistance. The proposal is also said to feature strong provisions to make evasion difficult, like targeting trusts, global assets, and offshore financial wealth.

It's already having big impacts across the corporate landscape. Mark Zuckerberg, a longtime California resident who previously threatened to leave the state, has reached an agreement with Meta (META) that will grant him greater flexibility to sell company shares while retaining control of the tech giant. A stock split would create a new class of non-voting Class C shares, provided he remains a resident of California for eight years, or wherever Meta maintains its headquarters.

Other notable billionaires who would get hit with the tax include Nvidia (NVDA) CEO Jensen Huang, as well as the chief executives of Salesforce (CRM), Snap (SNAP), Airbnb (ABNB), and DoorDash (DASH). However, some tech titans scrambled to leave before the Jan. 1, 2026 cutoff date. Those include high-profile names like Google (GOOGL) co-founders Larry Page and Sergey Brin, PayPal (PYPL) and Palantir (PLTR) co-founder Peter Thiel, and former Uber (UBER) CEO Travis Kalanick.

Outlook: The issue has divided the public. Proponents say the measure will provide an avenue for billionaires to pay their fair share instead of hoarding untaxed, passive wealth. Opponents counter that there is always room for the rich to wrangle with the system, and it would discourage California business investment, risk expansion to millionaires and the middle class, or promote "one-time" capital levies instead of structurally balanced budgets.