California billionaire wealth tax draws backlash as wealthy consider leaving the state

Proposition 40, the 2026 Billionaire Tax Act, qualified for the November 3, 2026 ballot and would levy a 5% tax on the net worth of California residents and certain trusts valued at $1 billion or more. Proceeds are earmarked primarily for healthcare, with smaller shares for education and food assistance.

Legal experts warn the measure faces substantial constitutional challenges under both U.S. and California law, including due‑process concerns, potential violations of the Dormant Commerce Clause, and accusations of a bill of attainder or takings. At the same time, the state is preparing to pursue billionaires who have moved out of California in protest, a development that could cut an estimated $27 billion in expected revenue, according to market analysts.

Only six billionaires are reported to have left so far, but the exodus and funding of opposition campaigns have lowered market expectations for the measure’s passage to about 29.5%, down from 34% a week earlier.