California voters are set to decide whether to impose a one-time 5% tax on the net worth of the state’s billionaires to help fund healthcare amid federal funding cuts.

The proposed measure, Proposition 40, would apply retroactively to people with a net worth of at least $1 billion who were residents of California on 1 January 2026.

The proposal aims to raise $100 billion to help offset federal funding cuts to California’s healthcare system. Supporters say the tax would ensure the ultra-wealthy contribute more towards public services and help address the state’s widening wealth gap.

The measure has divided political leaders and wealthy residents, with some billionaires reportedly leaving California ahead of the deadline to avoid the proposed tax.

At least six billionaires, including Google co-founders Larry Page and Sergey Brin, venture capitalist Peter Thiel and former Uber chief executive Travis Kalanick, have reportedly left the state.

Los Angeles businessman Don Hankey told Forbes that he moved to Nevada because of the proposed tax, saying his companies had created jobs in California and employed thousands of people.

Meta chief executive Mark Zuckerberg has also considered moving his primary residence out of California. Estimates suggest he could owe as much as $12.5 billion if the measure is approved.

Opposition to the proposal includes California Governor Gavin Newsom, who has warned that the tax could drive wealthy residents away and reduce the state’s income tax revenue. Sergey Brin has reportedly donated more than $100 million to a political organisation funding efforts to block the measure.

However, some billionaires, including Nvidia chief executive Jensen Huang and businessman Tom Steyer, have expressed support for the tax.

A September poll by the Berkeley Institute of Governmental Studies and the Los Angeles Times found that 45% of likely voters supported the proposal, while 42% opposed it and 13% remained undecided.

The measure would require approval from a majority of voters.

California has one of the largest concentrations of billionaires in the world, alongside a significant wealth gap and the largest share of homeless people among US states.

Supporters argue that the tax would help reduce inequality and protect healthcare services. Critics of wealth taxes, meanwhile, warn that they can discourage investment, create administrative challenges and prompt wealthy individuals to move elsewhere.

The proposal comes amid broader debate over wealth inequality in the United States, where the top 1% of households held nearly 32% of the country’s wealth in the third quarter of 2025, according to the source report.