Opinion | The Case for California’s Billionaire Wealth Tax

Opinion Guest Essay

The Case for California’s Billionaire Wealth Tax

1982 $22 billion

By Emmanuel Saez and Gabriel Zucman

Mr. Saez is an economist at the University of California, Berkeley. Mr. Zucman is an economist at the Paris School of Economics. May 26, 2026

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On taxes and much else, California has often led the country. In 1978 the state’s voters approved Proposition 13, which strongly limited tax increases. Prop 13 was the opening salvo in Ronald Reagan’s antitax revolution, which swept the United States two years later.

This year California’s voters could spearhead a shift in the opposite direction. A large labor union representing health care workers and advised by academic experts — including the two of us — got the 2026 Billionaire Tax Act on this November’s ballot. The proposed tax would be a one-time levy of 5 percent on billionaire wealth, spread over five years. If the measure passes, it would be the first tax targeted at the combined personal and business wealth of billionaires enacted anywhere in the world.

California is an ideal place to test this idea. The state needs money to fill a budget hole that the Trump administration created when it cut, among other things, Medicaid, a state-federal partnership that provides health coverage to low-income people. Without more state tax revenue to fill the loss in federal funding, the fraction of uninsured Californians will increase substantially, reversing part of the progress made since Obamacare.

The state is also home to many extremely wealthy people. On Monday we released a working paper that documents the explosive growth in the wealth of California billionaires. California’s wealthiest billionaires, 2005

$200 million in today’s dollars

Larry Ellison Oracle • $28 billion

Sergey Brin Google • $18 billion

Larry Page Google • $18 billion

Kirk Kerkorian MGM • $16 billion

Sumner Redstone CBS, Viacom • $14 billion

Donald Bren Irvine Company • $9 billion

Eli Broad KB Home, SunAmerica • $9 billion

Gordon Moore Intel • $8 billion

David Geffen DreamWorks SKG, Geffen Records • $7 billion

Barbara Davis and family Family fortune • $7 billion

Silicon Valley’s growth over recent decades has made California rich — and one of the most unequal places in America. Two decades ago, the state’s 10 wealthiest residents were worth a combined $134 billion.

Since then, the combined wealth of California’s 10 richest people has grown ninefold. The fortunes of the list’s upper echelon — Sergey Brin, Jensen Huang, Larry Page and Mark Zuckerberg — now equal about 24 percent of the state’s G.D.P.

A California ballot initiative that will be put to voters in November would tax just 5 percent of billionaires’ fortunes over five years. This trailblazing wealth tax would be a small (for the ultrawealthy) but important (for everyone else) step toward raising needed tax revenue and curbing the state’s runaway inequality.

The billionaire class in California includes roughly 250 households, a mere 0.001 percent of the state’s families. Yet its wealth now amounts to more than half of California’s entire annual economic output.

This means that if these billionaires spent all of their wealth, they could buy more than half of the goods and services produced in a year in the entire state.

This extraordinary wealth does not translate into extraordinary tax contributions.

From 2019 to 2025, California billionaires’ wealth grew an average of over 15 percent per year, while they paid, on average, just 0.26 percent of their wealth annually in state income taxes. Their income tax payments accounted for only 2.4 percent of California’s income tax revenue.

For the very richest individuals, the effective burden was even lower. The four wealthiest Californians — Mr. Brin, Mr. Huang, Mr. Page and Mr. Zuckerberg — paid an average of just 0.07 percent of their wealth annually in California income tax over that period, according to our analysis of Securities and Exchange Commission records on stock sales and executive compensation from their companies.

California’s tax system fails to effectively tax ultrahigh-net-worth individuals. The same is true of the United States’ tax system and those of other countries.

The problem is that billionaires’ fortunes are largely held in assets (mainly stocks) that rise in value over time. This rise in value is not taxed unless the assets are sold. Under current law, when billionaires don’t sell their stock, wealth accumulates while taxes on their gains are deferred indefinitely and sometimes avoided entirely.

Increase in wealth, 2019–25 Mark Zuckerberg Increase in wealth, 2019–25 $192 billion

Income $7.1 billion

Despite making so much money, Mr. Zuckerberg was taxed a combined state and federal rate of just 27 percent on that income. That’s not much higher than the average California household’s effective tax rate of about 20 percent. Mr. Zuckerberg’s tax rate was relatively low in large part because most of his income was in the form of capital gains — what he made from selling stock that had risen in value. Capital gains are taxed federally at a lower rate than ordinary income.

But a vast majority of Mr. Zuckerberg’s wealth is hidden from income taxes.

Since 2019, Meta has made hundreds of billions of dollars in profit. As Meta’s chief executive, Mr. Zuckerberg has invested much of that money back into the company, of which he owns about 13 percent. These profits have been taxed at a relatively low 17 percent, Meta’s effective corporate income tax rate. Their reinvestment has boosted the company’s value and, therefore, the value of its shares. This caused Mr. Zuckerberg’s wealth to rise by tens of billions of dollars.

California’s other top billionaires have similarly structured fortunes. Without a wealth tax, these tech barons will continue to hoard the rewards of the state’s economic growth while its cities cut services and its workers lose health care.

This arrangement violates basic principles of fairness, deprives the government of revenue it needs for public services and fuels wealth concentration. Overwhelming wealth becomes power — power to influence the direction of corporate behemoths, power to sway society through donations and media ownership, power to steer politics through unlimited campaign contributions to super PACs. Elon Musk’s recent adventures in the executive branch, after spending hundreds of millions of dollars to help elect Donald Trump, demonstrate how quickly concentrated wealth can transmute into political control.

Taking such a small bite out of billionaires’ exponentially growing tech wealth wouldn’t doom Silicon Valley because the value of California’s concentrated tech talent dwarfs the proposed wealth tax. Nvidia’s chief executive, Mr. Huang, who would be one of the biggest payers of the tax, said he would be “perfectly fine” with it.

Other myths about the proposal need to be dispelled. It would tax only billionaires. It has been carefully written to respect the California and U.S. Constitutions. It contains provisions designed to prevent taxation beyond 5 percent of the fair market value of anyone’s shares and to avoid hitting start-ups hard. Billionaire entrepreneurs, with sizable illiquid stakes in newly founded private companies, would be able to defer payments until they began to cash out.

It is too late for superrich Californians to flee the state to avoid the tax. If approved in November, the tax would apply to billionaires who were residents of California as of Jan. 1, 2026. Some affected taxpayers might have left between the ballot initiative’s introduction, in late October 2025, and the end of the year. But it is improbable that any significant number of billionaires fully cut ties with California in that short period.

Critics of the ballot measure have voiced concerns that even a small number of billionaires leaving the state would lead to lower state tax revenues overall. Their math doesn’t add up. California’s billionaires currently pay such a low tax rate that even if all of them left the state, it would take 25 years for the loss of their tax payments under the current set of rules to surpass the amount the state would raise if the one-time tax succeeds this fall.

What if the billionaires left California?

In 2025, California collected

$4.1 billion in income tax from

resident billionaires.

$4.1B

We estimate that California would collect

25 times that much revenue — about $103 billion — from the proposed wealth tax.

In 2025, California collected $4.1 billion in income tax from its billionaires.

We estimate that California would collect about 25 times that much revenue —

about $103 billion — from the proposed wealth tax.

While billionaires who no longer run their businesses day to day may choose to eventually leave California, uprooting an established business that relies on the pool of California’s tech talent and tech ecosystem would be much harder: While Mr. Page and Mr. Brin may leave for Florida or Nevada, there are no discussions of Google leaving Mountain View.

California’s tech sector produces billionaires faster than any other state’s. Its superrich — who have benefited from the state’s infrastructure, universities and networks of people and businesses — have accumulated enormous fortunes almost tax-free. The proposed billionaire tax would finally make them contribute in modest proportion to their gains. In November, California’s voters should show the nation the way forward.

Methodology and sources

Our research tracks California billionaires’ wealth using the lists of U.S. billionaires compiled by Forbes annually since 1982 and daily since 2019. For the four richest Californians (Mr. Brin, Mr. Huang, Mr. Page and Mr. Zuckerberg), we estimated income, wealth gains and taxes paid on their company wealth (Alphabet, Meta and Nvidia) using publicly available Securities and Exchange Commission data for stock ownership, stock sales, stock donations and stock option exercises and Compustat data for dividends (prorated to their stakes) and executive compensation. For the top four, company wealth was 97 percent of their total Forbes wealth at the end of 2025. California income taxes paid by all California billionaires are estimated using California income tax administration tabulated statistics and an extrapolation calibrated from Balkir et al. (2025), a national study on taxes paid by billionaires. Data for the line and bar charts is through May 7, 2026.

Source photographs by Mike Blake/Reuters; Kimberly White/Getty Images; Jamie McCarthy/Getty Images; Jordan Strauss/Invision, via Associated Press; Elizabeth Frantz/Reuters; Fabrice Coffrini/Getty Images; Bruce Bennett/Getty Images; Kenny Holston/The New York Times; Mike Cohen/The New York Times; Mike Blake/Reuters; Jay L. Clendenin/Los Angeles Times, via Getty Images; Chelsea Lauren/Getty Images for Joan Dangerfield; Amy Sussman/Getty Images for LACMA; Peter DaSilva/The New York Times; Richard Drew/Associated Press; Carolyn Fong/The New York Times; Alex Welsh/The New York Times; Kelsey McClellan/The New York Times; Justin Sullivan/Getty Images; Fred Prouser/Reuters; Kendrick Brinson/The New York Times; Krista Schlueter/The New York Times; Robert Stolarik/The New York Times; Jutharat Pinyodoonyachet/The New York Times; Jim Wilson/The New York Times; and Monica Almeida/The New York Times.

Emmanuel Saez is an economist at the University of California, Berkeley. Gabriel Zucman is an economist at the Paris School of Economics. They are the authors of “The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay.”

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