California voters face a one-time 5% tax on billionaire assets

California’s upcoming ballot asks voters to approve a unique, one-time tax that would take 5% of the total assets of roughly 250 billionaires living in the state. Proponents, including labor unions and progressive legislators, argue the measure would capture wealth that currently escapes taxation through unrealized capital gains. Critics, many of whom are among the targeted billionaires, claim the tax could drive them out of California, and some have already relocated.

Academic research cited suggests that past state-level taxes on millionaires generated significant revenue with minimal migration, though the scale of this proposal is unprecedented. Experts also warn that a single, large levy may be a temporary fix for a chronic problem, and point to proposals that would tax annual increases in billionaire fortunes instead. The debate reflects broader national conversations about how to close loopholes that let the ultra-rich avoid taxes on appreciating assets.