Key facts
- A California ballot measure for a 'one-time' wealth tax on assets over $1 billion has qualified for the November ballot.
- The initiative includes provisions for "covered assets" such as unrealized gains in private company stock.
- The measure allows the state legislature to amend its provisions with a two-thirds vote, potentially lowering the threshold or making the tax annual.
- Several billionaires, including Larry Page, Sergey Brin, Peter Thiel, and Travis Kalanick, have relocated from California.
- The initiative's retroactivity to January 1, 2026, is expected to face constitutional challenges.
A new ballot initiative in California, titled the "One-Time Wealth Tax for State-Funded Healthcare, Education, and Food Assistance Programs Initiative," has qualified for the November ballot. This measure proposes a "one-time" tax of 5 percent on "covered assets" valued over $1 billion. "Covered assets" include unrealized gains on stock owned by employees of private companies, which are subjective and volatile. The initiative's provisions allow for potential amendments by the state legislature with a two-thirds vote, which could lead to lowering the threshold, making the tax annual, or eliminating exemptions for real estate and retirement accounts. The measure is also designed to potentially override protections from Proposition 13. The potential for this tax has already prompted at least six billionaires, including Google co-founders Larry Page and Sergey Brin, PayPal co-founder Peter Thiel, and former Uber CEO Travis Kalanick, to relocate out of California. The estimated potential tax revenue loss from these departures is $27 billion. The initiative's retroactive application to January 1, 2026, is expected to face constitutional challenges, though other provisions are likely to survive.