Zuckerberg Faces $12.5 Billion Bill as California Voters Weigh Wealth Levy

Mark Zuckerberg and more than 200 other California residents with net worths exceeding $1 billion face a potential one-time tax of 5% under Proposition 40. The measure appears on the ballot this November and would levy a fee on the total assets of every billionaire living in the state. If approved, the tax would apply retroactively to anyone who resided in California as of January 1, 2026, and was worth at least $1 billion at that time.

Supporters estimate the levy will generate $100 billion. They intend to use the funds to cover federal cuts to the state’s healthcare system resulting from recent national tax and spending legislation. Suzanne Jimenez, a representative for the Service Employees International Union-United Healthcare Workers West, described the proposal as a "short-term solution." She warned that without such action, the state’s healthcare infrastructure would face a "collapse" before a longer-term funding model could be established.

The tax targets a specific slice of the state’s population. California maintains the largest economy in the United States and ranks fourth globally. Despite this economic scale, the state holds the largest share of homeless individuals in the nation and exhibits one of the widest wealth gaps. Francesco Trebbi, a public policy professor at the University of California, Berkeley, identified the measure as likely the first billionaire tax in the world. He noted it targets an extreme percentile of the wealth distribution.

Governor Gavin Newsom, whose term is ending, has emerged as a prominent opponent. He argues the tax may cause wealthy residents to leave the state, thereby reducing income tax revenue. Google co-founder Sergey Brin has contributed more than $100 million to a political organization funding ballot measures that could block the proposal. A September poll conducted by the Los Angeles Times and the Berkeley Institute of Governmental Studies found that 45% of likely voters support the measure, 42% oppose it, and 13% remain undecided. A majority vote is required for passage.

Several high-profile residents have already relocated. At least six billionaires have reportedly moved out of the state, including Google co-founders Larry Page and Sergey Brin. Venture capitalist Peter Thiel, former Uber chief Travis Kalanick, and Hankey Group founder Don Hankey are among those who left. Hankey told Forbes that he moved to Nevada because the proposal made him feel unwelcome, despite the jobs his companies created.

Meta chief Mark Zuckerberg informed the company’s board last month that he was considering moving his primary residence out of California. Meta, which is headquartered in the state, approved a stock deal granting him additional shares. This transaction is designed to offset the financial impact of the tax, which could cost him up to $12.5 billion. Andy Fang, a co-founder of DoorDash, criticized the measure as "stupid."

Not all wealthy residents oppose the levy. Nvidia chief Jensen Huang told CBS that he does not mind paying taxes and accepts that higher income should result in higher tax payments. Senator Bernie Sanders addressed a rally in Los Angeles, stating that billionaires believe they have a "God-given right to rule." He predicted that voters would provide a "very powerful lesson" on November 3.

The proposal is part of a wider trend in US taxation. Washington state voters are currently considering a 9.9% tax on income exceeding $1 million annually. Historically, wealth taxes were common in Europe, though only Spain, Norway, and Switzerland currently maintain them. Kristian Niemietz of the Institute of Economic Affairs described such levies as "more trouble than they are worth."

Data from the third quarter of 2025 shows that the top 1% of US households hold nearly 32% of total wealth. This figure represents the highest level of inequality in over three decades. A survey by the Public Policy Institute of California found that 72% of state residents believe the gap between rich and poor is widening. A similar percentage said the state government should do more to address the disparity. Trebbi attributed the measure to an "anti-elite, anti-system sentiment," noting it is less about the specific bill and more about an effort to "re-balance the scale a little bit."