---
title: "California’s $100 Billion Billionaire Tax Comes With Two Built-In Off Switches"
description: "Prop 40 taxes net worth above $1 billion at 5%. Props 41 and 42, funded mostly by Sergey Brin, can void it even if it wins."
author: "Luis Goa"
published: 2026-10-18T13:27:41Z
modified: 2026-10-18T16:03:27Z
url: https://rews.cc/a/california-s-100-billion-billionaire-tax-comes-with-two-buil-6f81ae
language: en
tags: ["tax", "trump", "healthcare", "billionaires", "politics", "us"]
publisher: "Rews (https://rews.cc)"
---

# California’s $100 Billion Billionaire Tax Comes With Two Built-In Off Switches

*Prop 40 taxes net worth above $1 billion at 5%. Props 41 and 42, funded mostly by Sergey Brin, can void it even if it wins.*

By Luis Goa · October 18, 2026 · https://rews.cc/a/california-s-100-billion-billionaire-tax-comes-with-two-buil-6f81ae

## In brief

- Prop 40 would tax net worth above $1 billion at 5%, due in 2027, with 90% of revenue earmarked for health care
- LAO estimates ‘tens of billions’ in revenue; backers project $100 billion over five years
- Props 41 and 42, funded mainly by Sergey Brin’s $102m+, can nullify Prop 40 if they get more yes votes
- Six billionaires, including Brin, Page and Thiel, changed residency before the Jan 1, 2026 cutoff
- Nvidia CEO Jensen Huang says he welcomes an estimated $8 billion tax bill over five years

Proposition 40 on California’s November 3 ballot would impose a one-time 5% tax on the net worth of state residents worth more than $1 billion, due in 2027. The California Secretary of State’s official summary puts the rate on a sliding scale below $1.1 billion and full force above it, applied to public and private equity, art, intellectual property, vehicles, trusts and any dependent’s assets over $50,000. It excludes real estate, pensions and retirement accounts. The campaign behind it, led by the healthcare union SEIU United Healthcare Workers West, projects $100 billion in revenue over five years, 90% earmarked for health care. The state’s own Legislative Analyst’s Office, which has to score the measure without a campaign’s incentive to round up, puts it lower: probably ‘tens of billions of dollars’ spread over several years, offset by a possible ongoing loss of ‘less than $1 billion per year’ in income tax as wealthy residents leave, according to the LAO’s analysis. Those are two different numbers from two different methods — a backer’s target versus a legislative scorekeeper’s range — and the gap between them is the whole fight.

The residency date matters as much as the rate. Liability attaches to whoever lived in California on January 1, 2026, which is why at least six billionaires, including the Google co-founders Larry Page and Sergey Brin, the venture capitalist Peter Thiel and the former Uber chief Travis Kalanick, changed their registered residence before that date, as detailed in an earlier rews account of the [exodus and the court fight over it](https://rews.cc/a/california-s-ballot-tax-the-billionaires-ban-taxing-the-bill-bc65bc). Page converted his family office to a Delaware entity with a Florida address and bought two Miami mansions; Brin, rather than settling in Florida, registered to vote in Nevada in December and bought a $42 million house on the Nevada side of Lake Tahoe, which Forbes reported made him [the richest resident of that state](https://www.forbes.com/sites/mattdurot/2026/10/16/sergey-brin-registered-to-vote-in-nevada-amid-california-billionaire-tax-frenzy/) — and means he will not get a ballot to vote on the measure he is spending the most money to defeat.

## Two off switches

Prop 40 carries a clause that most voters will not read closely: if either Proposition 41 or Proposition 42 draws more yes votes than Prop 40 draws, Prop 40 is nullified outright, win or lose on its own terms. Both counter-measures are funded through a committee called Building a Better California, which Brin and the venture capitalist John Doerr are the largest donors to; Brin alone has put more than $102 million into the effort, a figure covered in an earlier rews story on [his spending against the measure](https://rews.cc/a/sergey-brin-spends-102-million-to-fight-california-wealth-ta-8faffc). Prop 41 would require any new earmarked tax to count against the Gann Limit, a 1979 constitutional cap on state spending per resident adjusted for inflation; Prop 40 is written to exempt itself from that cap, so Prop 41 would strip the exemption retroactively. Prop 42 bans any new state tax on personal property enacted after January 1, 2026, and bars retroactive taxation — Prop 40 is both personal-property-adjacent and explicitly retroactive to that date. Neither measure names Prop 40 or billionaires in its ballot text.

**How a 'yes' on 40 can still lose** The nullification mechanism written into Proposition 40

| From | To | How |
| --- | --- | --- |
| SEIU-UHW *(1.6m signatures)* | Prop 40 *(5% one-time wealth tax)* | qualifies |
| Sergey Brin & donors *($102m+)* | Building a Better California PAC | funds |
| Building a Better California PAC | Prop 41 *(Gann Limit audit rule)* |  |
| Building a Better California PAC | Prop 42 *(bans personal-property tax)* |  |
| Prop 41 *(Gann Limit audit rule)* | Prop 40 nullified | if more yes votes than 40 |
| Prop 42 *(bans personal-property tax)* | Prop 40 nullified | if more yes votes than 40 |
| Prop 40 nullified | Prop 40 *(5% one-time wealth tax)* |  |

![How a 'yes' on 40 can still lose. The nullification mechanism written into Proposition 40](https://rews.cc/img/fd3a5af7adc4539da396a5ab139ff5c2e8b2c842.webp)

Based on [California Secretary of State voter guide; San Francisco Chronicle editorial board](https://voterguide.sos.ca.gov/propositions/40/index.htm)

Both counter-measures poll short of a majority on their own, but so does Prop 40. A Berkeley Institute of Governmental Studies poll released August 14 found Prop 40 at 48% yes, 41% no, 11% undecided, among likely voters, according to the [IGS release](https://vcresearch.berkeley.edu/news/california-prop-40-billionaire-tax-holds-lead-new-uc-berkeley-igs-poll). A second IGS poll found support slipping to 45% yes, 42% no, 13% undecided, with Prop 41 at 37% yes/33% no and Prop 42 at 43% yes/34% no, per the [IGS release #2026-20](https://escholarship.org/content/qt3w14s99c/qt3w14s99c.pdf). The Public Policy Institute of California, polling likely voters September 4–10 with a different screen, found Prop 40 ahead 52% to 46%, according to its [statewide survey](https://www.ppic.org/publication/ppic-statewide-survey-californians-and-their-government-september-2026/). The two pollsters disagree by roughly 7 to 10 points on the same question in the same month; that gap is the methodological noise any of these measures has to clear to be called decided.

[![Prop 40: Poll finds California voters back billionaire tax and measure that could block it](https://i.ytimg.com/vi/0e4BGMmIx-U/hqdefault.jpg)](https://www.youtube.com/watch?v=0e4BGMmIx-U)

ABC7 News reports on polling that shows voters backing Prop 40 while also backing the measures that could nullify it. Video: ABC7 News Bay Area · YouTube

## The one billionaire who isn’t leaving

Jensen Huang, Nvidia’s CEO, is the exception CBS News found when it went looking for a billionaire willing to discuss the tax on camera, as [Jo Ling Kent reported for CBS Sunday Morning](https://cbsnews.com/news/proposition-40-californias-proposed-billionaire-tax-how-does-it-add-up/). Forbes put his net worth near $200 billion through early October, swinging as low as $199.3 billion and as high as roughly $204.5 billion within a single week as Nvidia’s share price moved, a volatility that itself shows why any wealth tax pegged to a market snapshot is an estimate, not a bill, until the valuation date arrives. Huang told CBS he expects to owe about $8 billion over five years if Prop 40 passes and holds.

> The fact that I can afford to pay $8 billion in taxes over five years is a privilege. I’m not afraid of paying taxes. I’m just afraid of being poor.

Opposition to Prop 40 does not split cleanly along party lines. Governor Gavin Newsom calls it ‘a flawed initiative’ and has backed Prop 42. Former congresswoman Katie Porter, a Democrat who has built a career needling corporate executives over taxes, argues the design is self-defeating: ‘When somebody leaves California, we can no longer tax them,’ she told CBS. ‘That is a permanent problem. It is much harder to get tax base back than it is to grow it in the first place.’ Ray Madoff, a Boston College law professor, takes the opposite reading of the same mechanics — that the wealth tax exposes a federal tax code that lets people living on investment gains defer tax indefinitely, calling the current arrangement one in which ‘the richest Americans have been written out of the tax system, much like the aristocracy of pre-revolutionary France.’ Madoff’s view is that Prop 40 can’t fix that by itself but could pressure Congress to.

![A wheeled yellow money bag rolls along a crumbling California-shaped platform while a gloved hand offers a single gold coin on a spoon.](https://rews.cc/img/aea35c60b77738819903d5f8e97f3c233a6696f8.webp)

## The architect under investigation

Dave Regan, the SEIU-UHW president who wrote and is campaigning for Prop 40, is also the subject of two internal union investigations that reported findings in late July 2026. Outside counsel hired by the national SEIU, the firm Cohen, Weiss and Simon, interviewed 18 current and former SEIU officials over roughly three months and concluded Regan told SEIU California’s governing council it risked a Department of Labor investigation unless it endorsed Prop 40 — an exchange that David Huerta, then president of SEIU California, told investigators left him feeling ‘extorted,’ according to [Hoodline’s account of the findings](https://hoodline.com/2026/09/california-union-boss-dave-regan-accused-of-extortion-intimidating-women-in-tax-fight/). A parallel investigation by the firm Barboza & Associates found Regan screamed an expletive at a union government relations director during a March fundraiser and deemed credible a separate allegation that he assaulted a different union employee in 2009. Regan has called the findings ‘internally contradictory,’ ‘fundamentally biased’ and ‘politically motivated,’ and remains SEIU-UHW’s president while the national union prepares an evidentiary hearing.

None of that changes the arithmetic Prop 40 asks voters to accept: a tax that, by the state’s own scorekeeper, will raise an uncertain sum from a shrinking and highly mobile tax base, written with a self-destruct clause its opponents are trying to trigger with two other measures on the same ballot. Regan told CBS he expects other states to copy California’s wealth tax ‘just like it’s happened so many times in the past.’ Whether that happens anywhere depends first on whether Prop 40 outpolls Props 41 and 42 by enough votes, in a single election, in a state that still has to count them before anyone finds out.

## See also

- [California Secretary of State: Proposition 40 official voter guide text](https://voterguide.sos.ca.gov/propositions/40/index.htm) — voterguide.sos.ca.gov · Full official ballot summary, arguments and legal text
- [CalMatters voter guide to Proposition 40](https://calmatters.org/california-voter-guide-2026/proposition-40-billionaire-tax/) — calmatters.org · Plain-language explainer with pro/con arguments
- [LAO ballot analysis of Proposition 40](https://lao.ca.gov/BallotAnalysis/Proposition?number=40&year=2026) — lao.ca.gov · The state's nonpartisan revenue and cost estimate
- [2026 California billionaire tax initiative (Wikipedia)](https://en.wikipedia.org/wiki/2026_California_billionaire_tax_initiative) — en.wikipedia.org · Timeline of qualification, funding and legal challenges