California divided over proposed wealth tax

The proposal would impose a one-time 5% tax on residents worth more than $1 billion and is reported to be retroactive to Jan. 1, 2026 if voters approve it in November; some wealthy Californians have moved entities out of state while others have voiced support or indifference.

California is considering a proposed one-time 5% wealth tax on residents whose net worth exceeds $1 billion. The measure is presented as a way to address a projected state budget deficit. Reporting says the proposal would take effect retroactively for residents as of January 1, 2026 if voters approve it in November. The plan has prompted different reactions among wealthy Californians. Key developments: - The proposal would impose a one-time 5% tax on assets of residents worth more than $1 billion to help address a projected budget shortfall. - If approved by voters in November, the tax is reported to be retroactive to residents as of Jan. 1, 2026. - Some high-net-worth individuals reportedly moved or re-incorporated entities out of California late in 2025, including actions linked to Google cofounder Larry Page and an entity tied to both Page and Sergey Brin. - Responses among prominent figures are split: Nvidia CEO Jensen Huang said he is "perfectly fine" with the tax and gave no sign he will leave, while voices such as Reid Hoffman and lawyer Alex Spiro warned the proposal could push money or talent elsewhere. Summary: The proposal has prompted both pre-emptive asset moves by some of the state's wealthiest residents and statements of acceptance from others. The measure will go to voters in November, and if approved it would apply retroactively to residents as of Jan. 1, 2026.