Californians reject Prop 40, the billionaire tax tech elites spent millions trying to stop

A proposed tax on billionaires

Proposition 40 would have imposed a one-time 5% tax on certain taxpayers whose assets exceeded $1 billion. It would have covered billionaires living in California on January 1, 2026; Forbes data compiled by Americans for Tax Fairness counted 214 people in that group.

Taxable wealth would have included business ownership stakes, securities, investment accounts, art, collectibles and intellectual property. Real estate, pensions and retirement accounts would generally have been excluded. Payments would have been due in 2027, with an option to spread them over five years at a higher cost.

Tech leaders financed opposition

Google cofounder Sergey Brin, former Google CEO Eric Schmidt, Affirm CEO Max Levchin, Stripe CEO Patrick Collison, DoorDash CEO Tony Xu, Kleiner Perkins Chairman John Doerr and angel investor Chris Larsen collectively contributed millions to oppose the measure. CalMatters reported that Brin donated more than $100 million.

Other executives considered how the tax might affect them. Meta CEO Mark Zuckerberg weighed moving out of California. In October, Meta announced a new share class that would provide Zuckerberg with $20 billion in immediate liquidity, potentially helping him pay the tax without surrendering some voting power. Nvidia CEO Jensen Huang said in January on Bloomberg TV that he had not considered the issue and was comfortable with whatever taxes California chose to impose.

Other measures and revenue debate

Propositions 41 and 42 were designed to constrain state taxes and could have blocked Proposition 40 if either received more “Yes” votes, even if voters approved the tax measure. A Stanford economists’ working paper for the National Bureau of Economic Research, published in October, estimated the tax might initially raise about $30 billion. It also warned that departures by high-earning executives could produce a net loss of $38.9 billion.