Lawmakers in California, USA, are pushing forward with a controversial proposal that could see the state's wealthiest residents pay a significant one-time tax. The so-called Billionaire Tax Act aims to impose a 5% levy on individuals with a net worth exceeding $1 billion.
What is the California Billionaire Tax Proposal?
If the measure gathers enough public support through signatures, it will be placed on the ballot for voters in November 2026. The proposed tax is designed to be retroactive, applying to the net worth of eligible residents as of January 1, 2026. This has sparked intense debate about its potential economic impact.
Legal representatives for wealthy clients have already raised alarms with Governor Gavin Newsom. They warn that this wealth tax could precipitate a major exodus of capital and innovation from the state, potentially harming California's economic engine.
Who Are the Billionaires in the Crosshairs?
Data from Forbes, compiled by Americans for Tax Fairness and reported by Business Insider, reveals the scale of the proposal. As of January 2026, an estimated 214 to 241 billionaires call California home, more than any other US state. The list is dominated by titans of the technology sector but also includes leaders from real estate, entertainment, and finance.
Prominent names that could be affected include Google co-founders Larry Page and Sergey Brin, Meta's Mark Zuckerberg, and Tesla and SpaceX CEO Elon Musk. Notably, reports suggest Page and Brin have already begun moving certain entities out of California ahead of the potential deadline.
Mixed Reactions from the Tech Elite
The proposal has elicited divergent responses from California's billionaire community. In a notable show of support, Nvidia's CEO Jensen Huang has expressed his approval of the wealth tax concept.
However, strong criticism has emerged from other quarters. Palmer Luckey, the founder of defense technology company Anduril, has voiced serious concerns. He argues that such a tax would force companies to pivot into profit obsession over mission or long-term sustainability, potentially stifling ambitious innovation.
The debate underscores a fundamental tension between state revenue needs and the mobility of ultra-high-net-worth individuals. The final decision now rests with California's voters, who will have their say in the 2026 election.
