CALIFORNIA — Six Nobel Prize-winning economists endorsed Proposition 40 in a letter published on September 19, 2026. The ballot initiative in California would impose a one-time tax equal to 5% of the net worth of residents with assets exceeding $1 billion.

The Nobel laureates who endorsed Proposition 40 are Daron Acemoglu, Abhijit Banerjee, Peter Diamond, Esther Duflo, Paul Krugman, and Joseph Stiglitz. They estimated that California’s 250 billionaires are collectively worth $2.3 trillion. The group stated that state income taxes paid by California billionaires amounted to 1.6% of their $1.4 trillion wealth gain from 2019 to 2025.

The economists wrote that the explosive growth of the state’s billionaires over the past few decades has made California one of the most unequal places in America, and that "California is the right place to take this historic step." They warned that if the measure fails, inequality could persist, but if it passes, it could have broader implications. They said that if the state that houses some of the country’s most powerful billionaires votes to tax their wealth, it will kickstart a movement to tax ultra-high-net-worth individuals in other states — and eventually at the federal level and in other countries. The economists added that as Californians head to the polls, their vote may well come to be seen as a turning point in the battle between democracy and oligarchy.

Proposition 40 is a combined initiated constitutional amendment and state statute that will appear on the November 3, 2026, ballot in California. The tax under Proposition 40 applies to individuals who were California residents on January 1, 2026. Tax payments under Proposition 40 are due in 2027, but taxpayers may spread the payment over five years at an additional cost. The measure excludes directly owned real estate, pensions, and certain retirement accounts from the wealth calculation.

Supporters of the measure include the Service Employees International Union-United Healthcare Workers West, which estimates it could raise $100 billion in revenue. U.S. Representative Ro Khanna supports Proposition 40. Nvidia CEO Jensen Huang stated he is "perfectly fine" with Proposition 40.

Lorena Gonzalez, president of the California Federation of Labor Unions, supports Proposition 40. She said she has always been very honest that she thinks billionaires shouldn’t exist and that it doesn’t bother her in the least to tax billionaires out of existence.

Governor Gavin Newsom opposes Proposition 40. He said he believes it's a race to the bottom for states, that states are competing with other states, and urged people to wake up. He added that you can't tax something that's left. Google cofounder Sergey Brin contributed over $100 million to oppose Proposition 40. Opponents of Proposition 40 have spent more than $127 million to defeat the measure.

Critics point to recent migration trends among the wealthy. Larry Page and Sergey Brin moved from California to Miami. Peter Thiel moved from California to Miami.

Jeff Bezos and Howard Schultz moved from Washington to Florida. Larry Ellison saved an estimated $1 billion in taxes by making an estate in Palm Beach County his primary residence before selling Oracle stock. Nineteen of Florida’s 20 richest billionaires officially reside in Miami. Miami’s millionaire population grew 94% in the decade leading up to 2025, reaching nearly 40,000.

A civil lawsuit was filed on September 18, 2026, in the U.S. District Court for the Eastern District of California against Dave Regan and SEIU-United Healthcare Workers West. The lawsuit accuses SEIU-United Healthcare Workers West and Dave Regan of using ballot measures to extort concessions from community health centers. The lawsuit alleges SEIU-United Healthcare Workers West spent $216 million in union dues pushing dozens of ballot measures. Plaintiffs in the lawsuit include Shasta Community Health Center, Hill Country Community Clinic, California Primary Care Association, Mountain Valleys Health Centers, Centro de Salud de la Comunidad de San Ysidro, Inc. and McCloud Healthcare Clinic, Inc. SEIU-United Healthcare Workers West called the allegations in the lawsuit "categorically false."

Why It Matters

The endorsement by six Nobel laureates brings academic weight to the debate over wealth taxation in California. The measure targets a small segment of the population, with the economists noting that state income taxes paid by California billionaires amounted to only 1.6% of their wealth gain from 2019 to 2025. The potential revenue of $100 billion estimated by supporters contrasts with the concern from opponents that the tax will trigger capital flight. The migration of high-profile billionaires to states like Florida illustrates the mobility of ultra-wealthy individuals and the competitive pressure on state tax policies.

The outcome of Proposition 40 could influence national tax policy. The economists argued that a vote to tax wealth in California could kickstart a movement in other states and at the federal level. Critics say such a tax could harm the state's economy by driving away entrepreneurs and investment. The close polling numbers indicate a divided electorate, with the final result depending on voter turnout and campaign spending in the weeks leading up to the November 3, 2026, election.

Timeline

In 2021, Mitt Romney warned that taxing billionaire wealth could cause investors to pull money away from publicly traded companies and invest in assets like ranches or paintings. He stated that these multibillionaires are going to look and say they don’t want to invest in the stock market because as that goes up, they would have to pay more tax, so they might instead invest in a ranch or in paintings or things that don’t build jobs and create a stronger economy. On January 1, 2026, the tax under Proposition 40 applies to individuals who were California residents on that date.

Plaintiffs in the lawsuit include Shasta Community Health Center, Hill Country Community Clinic, California Primary Care Association, Mountain Valleys Health Centers, Centro de Salud de la Comunidad de San Ysidro, Inc. and McCloud Healthcare Clinic, Inc. On September 19, 2026, six Nobel Prize-winning economists endorsed Proposition 40 in a letter. They wrote that as Californians head to the polls, their vote may well come to be seen as a turning point in the battle between democracy and oligarchy.

What's New

Additional reporting shows developments not covered in the initial wire copy.

Peter Thiel also moved from California to Miami. Governor Gavin Newsom said he believes it's a race to the bottom for states, that states are competing with other states, and urged people to wake up. Lorena Gonzalez said she has always been very honest that she thinks billionaires shouldn’t exist and that it doesn’t bother her in the least to tax billionaires out of existence.

How Sources Differ

Sources differ on the details of related propositions and their public support. The California Proposition 40 ballot measure text describes Proposition 40 as a ballot initiative in California that would impose a one-time tax equal to 5% of the net worth of residents with assets exceeding $1 billion. In contrast, the Public Policy Institute of California poll reports that Proposition 42, which would prohibit taxes on financial assets and personal property other than real estate, has 54% support versus 43% opposition.

Sources also present different data regarding California revenue impacts. The California Legislative Analyst’s Office report estimates that behavioral responses to the tax could reduce state income tax revenue by less than $1 billion per year. California state data indicates that the top 0.1% of earners in California contribute 20% of the state’s overall personal income tax revenue.