California Wealth Tax Faces Backlash From Economists, Billionaires

WHO:

NPR - Economist Gabriel Zucman, who works at UC Berkeley and the Paris School of Economics, supports California’s proposed billionaire wealth tax and co-authored an analysis with Jasper Boll and Emmanuel Saez.

NPR - Stanford economist and Hoover Institution senior fellow Joshua Rauh co-authored a competing analysis with Benjamin Jaros.

NPR - California billionaire Mark Zuckerberg reportedly arranged with Meta’s board to sell nonvoting shares to cover a possible tax bill while retaining company control; the reported deal includes an agreement to remain in California for eight years, subject to conditions, including Meta remaining headquartered there.

NPR - Nvidia CEO Jensen Huang said he was “perfectly fine” with the proposed tax and estimated his possible bill at about $8 billion. “I have not even thought about it once,” he said.

NPR - Rauh identified Larry Page, Sergey Brin, Peter Thiel, Don Hankey, Steven Spielberg, Travis Kalanick, and David Sacks as billionaires who had left California before the proposal’s residency cutoff. Zucman disputes that they necessarily ended their California tax residency.

NY Post - More than 100 economists signed a letter opposing California’s proposed wealth tax.

NY Post - A California billionaire who moved to Las Vegas before the proposal’s cutoff criticized the measure.

Drudge Report - California’s wealthy supporters of defeating the tax reportedly outspent its opponents 250 to 1.

WHAT:

NPR - Proposition 40 would impose a one-time 5% tax on billionaires’ net worth, with some assets exempted, and direct most proceeds to health care for low-income Californians to help offset federal Medicaid cuts.

NPR - Zucman, Boll, and Saez estimated the tax could raise about $100 billion, based on $2.3 trillion in estimated billionaire wealth, reduced by 10% for avoidance, evasion, and departures before the cutoff.

NPR - Rauh and Jaros estimated that departures and legal uncertainty could leave about $30 billion in tax revenue; they estimated that additional billionaire departures could ultimately cost California $39 billion in net revenue.

NPR - Rauh estimated the seven named departures alone reduced potential revenue by around $30 billion. Zucman said the legal experts he trusts consider it unlikely they successfully ended California residency before the cutoff.

NPR - The proposed tax would include business holdings and shares in companies run by billionaires. It would also reach assets held outside California.

NPR - California billionaire wealth was estimated by Zucman, Boll, and Saez at $2.3 trillion by mid-2026; they reported a 144% increase from 2023 to 2025. They said real wealth among the state’s top 0.001% of households increased 25-fold from 1982 to 2026, while average real family income doubled.

NPR - A New York Times report cited by NPR said opponents of the proposition had raised $333 million to defeat it.

NY Post - The article said similar wealth taxes had been adopted by about a dozen countries in recent decades and nearly all had later been abandoned.

WHERE:

NPR - The proposal concerns California; Brin reportedly moved to the Nevada side of Lake Tahoe.

NPR - Zuckerberg’s reported agreement requires Meta to remain headquartered in California.

WHEN:

NPR - The proposed tax applies retroactively to billionaires who were California residents on January 1, 2026.

NPR - Rauh said Proposition 40 was announced in late October 2025, leaving about two months before the residency cutoff.

NPR - Huang made his comments to Bloomberg in January; the article does not specify the year.

WHY:

NPR - Zucman argues a wealth tax could address rising inequality and raise funds because billionaires can structure finances to report little taxable income.

NPR - Rauh argues billionaires may leave over tax liability and concern California could pursue future wealth taxes, reducing income-tax revenue and investment.

HOW:

NPR - The proposed tax would apply to net worth, including assets such as stocks, yachts, artwork, and privately held businesses. Valuing some privately held assets could be disputed.

NPR - The proposition’s designers made the tax a one-time, retroactive levy tied to residency on January 1, 2026, and included fallback provisions intended to preserve parts of the tax if courts invalidate others.

NPR - Rauh cited possible constitutional challenges involving retroactivity, taxation of wealth outside California, and valuation of private companies; he said the Supreme Court could strike down part of the measure.

(UPDATED November 2, 2026 16:03 UTC)

California’s proposed billionaire wealth tax could raise $100 billion, supporters estimate. Opponents warn departures and legal challenges could sharply reduce revenue. Nvidia’s Jensen Huang says he’s fine with the tax, despite an estimated $8 billion bill.