The story so far
written Oct 27What is happening
California voters decide the fate of the California Billionaire Tax Act, known as Proposition 40, in the November 2026 election 2. The measure proposes a retroactive 5% tax on the worldwide net worth of residents exceeding $1 billion 211. Supporters estimate the act could generate $100 billion in revenue, while a report from the Independent Institute states the state has lost $50 billion in potential revenue due to the departure of high-net-worth individuals and businesses since 2021 2.
Governor Gavin Newsom signed 67 tax or fee increases from the 2025-26 legislative session into law by October 2026, totaling an estimated $14.3 billion in annual increases 1. These measures follow a period where California maintained the highest top personal income tax rate in the United States 1. The Franchise Tax Board is responsible for determining the total tax base and revenue estimates under the proposed act 12.
What to watch
The California State Senate and the California State Assembly passing the billionaire-tax bill would advance the measure. The Governor signing the bill into law would enact the tax. The release of the first quarterly revenue report by the California Franchise Tax Board would confirm tax collection totals.
Legal analyses of the act describe potential constitutional challenges regarding its retroactive application and the authority of the state to tax worldwide assets of former residents 11.
Read the full brief · how we got here
How we got here
The Independent Institute reported on October 9, 2026, that the exodus of businesses and wealthy individuals has impacted state revenue 2. Governor Newsom issued legislative updates on September 27 and September 30, 2026, regarding the status of bills from the most recent session 414. The proposed tax targets the worldwide net worth of individuals rather than just income earned within the state 211.
References · 6
- 1nypost.com — Gavin Newsom added $14B in new California taxes in final years as ...
- 2independent.org — Hasta la Vista, Baby
- 4gov.ca.gov — Governor Newsom issues legislative update 9.27.2026
- 11papers.ssrn.com — The 2026 Billionaire Tax Act and the Constitution: Retroactivity, Residency, and the Limits of California's Taxing Power
- 12factsonprop40.com — Economic and Fiscal Impacts of the Billionaire Tax Act
- 14gov.ca.gov — Governor Newsom issues legislative update 9.30.2026
What would close this
0 of 4 metTimeline
2newest firstWhen we started following: California Billionaire Tax Act projected to collect $40 billion as fiscal impact reports cite migration risks
The 2026 California Billionaire Tax Act proposes a one-time 5 percent tax on the worldwide net worth of individuals exceeding $1 billion 4. A fiscal assessment by the Hoover Institution and Stanford University researchers estimates the measure will collect approximately $40 billion 4. This figure is less than half of the $100 billion initially projected, with researchers attributing the gap to behavioral responses and potential departures from the state 4.
Related federal developments include the Strengthen Social Security by Taxing Dynastic Wealth Act of 2026, which was introduced to address social security funding through wealth taxation 3. Additionally, international frameworks continue to influence the local debate, specifically the Zucman Billionaire Tax proposal for a coordinated minimum effective taxation standard for ultra-high-net-worth individuals 1.
When we started following: California voters to decide on 5% retroactive wealth tax for billionaires in November election
California voters will decide the fate of the California Billionaire Tax Act (Proposition 40) in the upcoming November election 2. The measure proposes a retroactive 5% tax on the worldwide net worth of residents exceeding $1 billion 211. Supporters estimate the act could generate $100 billion in revenue, while a report from the Independent Institute suggests the state has already lost $50 billion in potential revenue due to the exodus of high-net-worth individuals and businesses since 2021 2.
Governor Gavin Newsom recently signed 67 of 156 proposed tax or fee increases from the 2025-26 legislative session into law, totaling an estimated $14.3 billion in annual increases 1. These measures follow a period where California maintained the nation's highest top personal income tax rate 1. The Franchise Tax Board is tasked with determining the total tax base and revenue estimates under the proposed act 12. Legal analyses of the act highlight potential constitutional challenges regarding its retroactive application and the state's authority to tax worldwide assets of former residents 11.