200 Billionaires v. California

Meta CEO Mark Zuckerberg closed a deal last week to purchase a $170 million mansion on Indian Creek, an island in Miami, Florida. It was the clearest sign yet that the centibillionaire is looking to abandon California, the state where he made his fortune, over a proposed ballot initiative that would tax the ultra-wealthy to cover federal cuts to healthcare and nutrition programs.

If passed, the California Billionaire Tax Act (BTA) would raise an estimated $100 billion through a one-time 5% wealth tax on the roughly 200 billionaires who resided in the state as of January of this year. That cut-off date means that it would still apply to billionaires like Zuckerberg who are attempting to leave the state before its passage.

Critics of the BTA have reveled in news reports that a handful of billionaires, such as Zuckerberg, Google co-founders Larry Page and Sergey Brin, and Palantir cofounder Peter Thiel, have made arrangements to relocate. “California will miss billionaires when they’re gone,” declared the editorial board of the Jeff Bezos-owned Washington Post, adding that the tax “would kill the Golden State’s golden goose.”

But in an interview with Oligarch Watch, Kris Cuaresma-Primm, head of partnerships for the BTA, noted that California’s billionaires — despite having a combined net worth of more than $2 trillion — make up a relatively minuscule part of the state’s income tax base. “All the billionaires in California currently contribute about only 2.5% of our income base,” he said. “And people across America and people in California realize it’s insane that the billionaires pay lower tax rates than the rest of us working families.”

The wealthiest Americans often avoid paying income taxes by arranging tiny salaries for themselves. Zuckerberg, for instance, has taken a base salary of $1 from Meta since 2013. To fund their lavish lifestyles, they perpetually borrow against the equity they hold in their companies or other assets, making much of their wealth unrealized and untaxed.

The BTA, which is sponsored by the Service Employees International Union-United Healthcare Workers West and St. John’s Community Health in Los Angeles, would seek to address these kinds of tax-avoidance loopholes by directly taxing the wealth held by California’s billionaires, something that has never been tried at this scale in American politics.

“What’s unique about our ballot proposition is we’re focused on wealth, right?” said Cuaresma-Primm, who also worked on the BTA’s legal and research teams. “The 200 billionaires in California have $2.2 trillion in wealth. This wealth has doubled over the last few years and grown at about 7.5% [every year] for the last couple of decades. Their wealth has skyrocketed while so many Americans are struggling.”

‘Tidal wave of pain’

The proposal is on track to exceed the 875,000 signatures it needs by June 24, according to Cuaresma-Primm, who said the BTA has attracted 5,000 volunteers to help gather signatures. If it reaches that threshold, the BTA will be placed on the ballot for California voters to decide on directly in November. Ballot measures in the state only require a simple majority to pass.

The proposal is a direct response to the $30 billion in annual cutbacks that Medi-Cal, the state’s Medicaid program, will face after the midterm elections due to Donald Trump’s H.R. 1 law, known as the One Big Beautiful Bill Act. Without a massive influx of new funding, those cuts will result in millions of Californians losing their health care. The BTA also seeks to cover billions of dollars in federal cuts to the state’s food assistance programs — another austerity product of H.R. 1 — that millions of children, seniors, and veterans rely on for meals and groceries.

As it happens, H.R. 1 created new tax loopholes for Zuckerberg and his company to exploit: Last year, Meta’s effective federal income tax rate was just 3.5%, a historic low it achieved even as its annual U.S. income reached a new high of $79 billion. In all, the Institute on Taxation and Economic Policy reported that Meta ducked $13.7 billion in federal income taxes, including billions of dollars in tax breaks for stock options paid to its executives.

To cover H.R. 1’s generous tax cuts for companies like Meta, the federal government opted to reduce the health care and food assistance programs that some of the poorest Americans rely on for survival.

“A massive tidal wave of pain is coming,” warned Cuaresma-Primm. “And this is the only solution on the table to solve something.”

‘The New Gilded Age’

In the months since the BTA entered the public discourse, new plans to more aggressively tax extremely wealthy people have been pitched at the federal level. After holding February rallies in California in support of the BTA, Sen. Bernie Sanders introduced a bill last week that would impose a federal 5% annual wealth tax on billionaires. “It is the most ambitious and transformative legislation for our times to tackle inequality in the New Gilded Age,” said Rep. Ro Khanna, a California Democrat who introduced Sanders’ legislation in the House. While the legislation has no real chance of passing in a Congress controlled by Republicans, it could serve as a new touchstone for Democratic candidates in 2028.

However, the most vocal Democratic presidential prospect has already made his unqualified opposition to the BTA known. Gavin Newsom, the governor of California, said in January that he would “do what I have to do” to kill the billionaire tax. “This will be defeated,” he added. “There’s no question in my mind.”

Over his nearly three decades in California politics, Newsom has received millions of dollars in campaign contributions from a plethora of California billionaires — new and old money alike. His billionaire donors have included former Google CEO Eric Schmidt, oil heir Gordon Getty, Gap founder Doris Fisher, hotel heir John Pritzker, Wonderful Company chairman Stewart Resnick, former Netflix CEO Reed Hastings, and DoorDash cofounder Andy Fang, who has decried the BTA, claiming “It could wipe me out.”

Opponents of the BTA are pursuing a number of avenues to defeat the proposal, including Peter Thiel, who has donated $3 million to a lobbying campaign. Chris Larsen, a crypto billionaire, has also pumped $5 million into a campaign committee that frames the BTA as anti-business. And Brin, the centibillionaire cofounder of Google, has given millions of dollars to competing ballot initiatives, which places pressure on the BTA to spend more on its signature drive.

Newsom, meanwhile, is appearing in ads funded by tech investors that claim the BTA will alienate high-earners whose incomes contribute to California’s tax base.

Still, Cuaresma-Primm remains hopeful that Newsom will come around. “What Gavin Newsom is doing is just out of touch with the thousands of California voters we’re talking to across the state,” he said. “We’ve talked to folks in places like Bakersfield, where about half the population is covered by Medi-Cal. What’s going to happen to the hospitals and clinics there in Bakersfield if you have a child, or you’re sick, or have cancer, or break an arm? … As Gavin Newsom gets a better understanding of the pain [that’s coming] and how much people want to avoid it, even he may come around.”

Some California billionaires have a more relaxed attitude about the tax proposal. Nvidia CEO Jensen Huang, whose wealth exceeds $151 billion, said he would be “perfectly fine with it.” Brian Chesky, the chief executive of Airbnb, has said he plans to remain in California.