Mr. Saez is an economist at the University of California, Berkeley. Mr. Zucman is an economist at the Paris School of Economics.<\/p>\n
May 25, 2026 <\/p>\n
On taxes and much else, California has often led the country. In 1978 the state\u2019s voters approved Proposition 13, which strongly limited tax increases. Prop 13 was the opening salvo in Ronald Reagan\u2019s antitax revolution, which swept the United States two years later.<\/p>\n
This year California\u2019s voters could spearhead a shift in the opposite direction. A large labor union representing health care workers and advised by academic experts \u2014 including the two of us \u2014 got the 2026 Billionaire Tax Act on this November\u2019s ballot. The proposed tax would be a one-time levy of 5 percent on billionaire wealth, spread over five years. If the measure passes, it would be the first tax targeted at the combined personal and business wealth of billionaires enacted anywhere in the world.<\/p>\n
California is an ideal place to test this idea. The state needs money to fill a budget hole that the Trump administration created when it cut, among other things, Medicaid, a state-federal partnership that provides health coverage to low-income people. Without more state tax revenue to fill the loss in federal funding, the fraction of uninsured Californians will increase substantially, reversing part of the progress made since Obamacare.<\/p>\n
The state is also home to many extremely wealthy people. On Monday we released a working paper<\/a> that documents the explosive growth in the wealth of California billionaires.<\/p>\n Silicon Valley\u2019s growth over recent decades has made California rich \u2014 and one of the most unequal places in America.Two decades ago, the state\u2019s 10 wealthiest residents were worth a combined $134 billion.<\/p>\n Since then, the combined wealth of California\u2019s 10 richest people has grown ninefold. The fortunes of the list\u2019s upper echelon \u2014\u00a0Sergey Brin, Jensen Huang, Larry Page and Mark Zuckerberg \u2014 now equal about 24 percent of the state\u2019s G.D.P.<\/p>\n A California ballot initiative that will be put to voters in November would tax just 5 percent of billionaires’ fortunes over five years. This trailblazing wealth tax would be a small (for the ultrawealthy) but important (for everyone else) step toward raising needed tax revenue and curbing the state’s runaway inequality.<\/p>\n The billionaire class in California includes roughly 250 households, a mere 0.001 percent of the state\u2019s families. Yet its wealth now amounts to more than half of California\u2019s entire annual economic output.<\/p>\n This means that if these billionaires spent all of their wealth, they could buy more than half of the goods and services produced in a year in the entire state.<\/p>\n This extraordinary wealth does not translate into extraordinary tax contributions.<\/p>\n From 2019 to 2025, California billionaires\u2019 wealth grew an average of over 15 percent per year, while they paid, on average, just 0.26 percent of their wealth annually in state income taxes. Their income tax payments accounted for only 2.4 percent of California\u2019s income tax revenue.<\/p>\n For the very richest individuals, the effective burden was even lower. The four wealthiest Californians \u2014 Mr. Brin, Mr. Huang, Mr. Page and Mr. Zuckerberg \u2014 paid an average of just 0.07 percent of their wealth annually in California income tax over that period, according to our analysis<\/a> of Securities and Exchange Commission records on stock sales and executive compensation from their companies.<\/p>\n California\u2019s tax system fails to effectively tax ultrahigh-net-worth individuals. The same is true of the United States\u2019 tax system and those of other countries.<\/p>\n The problem is that billionaires\u2019 fortunes are largely held in assets (mainly stocks) that rise in value over time. This rise in value is not taxed unless the assets are sold. Under current law, when billionaires don\u2019t sell their stock, wealth accumulates while taxes on their gains are deferred indefinitely and sometimes avoided entirely.<\/p>\n To understand how California\u2019s billionaires have become so unfathomably rich, it\u2019s helpful to think of their fortunes as icebergs.Some earnings are easy to see \u2014 and tax. From 2019 to 2025, Mr. Zuckerberg reported more than $7.1 billion in income from Meta: $181 million in compensation, $1.4 billion in dividends and $5.6 billion in gains from selling stock.<\/p>\n Despite making so much money, Mr. Zuckerberg was taxed a combined state and federal rate of just 27 percent on that income. That\u2019s not much higher than the average California household\u2019s effective tax rate of about 20 percent.Mr. Zuckerberg\u2019s tax rate was relatively low in large part because most of his income was in the form of capital gains \u2014 what he made from selling stock that had risen in value. Capital gains are taxed federally at a lower rate than ordinary income.<\/p>\n But a vast majority of Mr. Zuckerberg\u2019s wealth is hidden from income taxes.<\/p>\n Since 2019, Meta has made hundreds of billions of dollars in profit. As Meta\u2019s chief executive, Mr. Zuckerberg has invested much of that money back into the company, of which he owns about 13 percent.These profits have been taxed at a relatively low 17 percent, Meta\u2019s effective corporate income tax rate. Their reinvestment has boosted the company\u2019s value and, therefore, the value of its shares. This caused Mr. Zuckerberg\u2019s wealth to rise by tens of billions of dollars.<\/p>\n The same is true of the wealth Mr. Zuckerberg accumulated as Meta grew and investors became more bullish about the company. This dynamic increased the value of his shares by an additional $142 billion.Unless Mr. Zuckerberg sells his shares, all of this growth remains untaxed. But he can put his gains to use without selling them, borrowing tax-free against his holdings at low interest rates, as he did in 2023, when he pledged $3.1 billion worth of his Meta shares as collateral for a loan.<\/p>\n California\u2019s other top billionaires have similarly structured fortunes. Without a wealth tax, these tech barons will continue to hoard the rewards of the state\u2019s economic growth while its cities cut services and its workers lose health care.<\/p>\n Google\u2019s founders, Mr. Brin and Mr. Page, are the state\u2019s richest individuals, with more than $600 billion in wealth<\/a> between the two of them \u2014 up from $345 billion last September. They have come out against the wealth tax initiative while making moves to leave the state<\/a>. They benefit from the status quo. Mr. Brin has funded the political campaign against the measure and has funded signature collection for two competing ballot initiatives that could undercut the wealth tax, spending at least $57 million to fight it.<\/p>\n They stepped down from day-to-day management at the end of 2019. That year and in 2020 and 2023, each got from Alphabet, Google\u2019s parent company, only $1 per year in executive compensation. They didn\u2019t sell stock, and they didn\u2019t receive dividends or any other compensation relating to Alphabet, so they paid no income tax on their wealth related to the company. But their stock wealth rose by $133 billion, driven in part by the reinvestment of their share of company profits, which amounted to $20 billion in those three years. Scenarios like this show why some of the very wealthiest people in America are among the least taxed.<\/p>\n This arrangement violates basic principles of fairness, deprives the government of revenue it needs for public services and fuels wealth concentration. Overwhelming wealth becomes power \u2014 power to influence the direction of corporate behemoths, power to sway society through donations and media ownership, power to steer politics through unlimited campaign contributions to super PACs. Elon Musk\u2019s recent adventures in the executive branch, after spending hundreds of millions of dollars to help elect Donald Trump, demonstrate how quickly concentrated wealth can transmute into political control.<\/p>\n We don\u2019t imagine that a one-time 5 percent tax on the wealth of California billionaires, as proposed in the 2026 Billionaire Tax Act, would fix all these problems. But it could raise nearly $100 billion in revenue for California. This amount would make up for the funding the federal government is taking away from the state over the next five years. It would also be tiny relative to billionaires\u2019 recent wealth gains. In the past three years alone, the total wealth of California\u2019s billionaires grew by a staggering 144 percent, to over $2 trillion.<\/p>\n Taking such a small bite out of billionaires\u2019 exponentially growing tech wealth wouldn\u2019t doom Silicon Valley because the value of California\u2019s concentrated tech talent dwarfs the proposed wealth tax. Nvidia\u2019s chief executive, Mr. Huang, who would be one of the biggest payers of the tax, said he would be \u201cperfectly fine<\/a>\u201d with it.<\/p>\n Other myths about the proposal need to be dispelled. It would tax only billionaires. It has been carefully written<\/a> to respect the California and U.S. Constitutions. It contains provisions designed to prevent taxation beyond 5 percent<\/a> of the fair market value of anyone\u2019s shares and to avoid hitting start-ups hard. Billionaire entrepreneurs, with sizable illiquid stakes in newly founded private companies, would be able to defer payments<\/a> until they began to cash out.<\/p>\n It is too late for superrich Californians to flee the state to avoid the tax. If approved in November, the tax would apply to billionaires who were residents of California as of Jan. 1, 2026. Some affected taxpayers might have left between the ballot initiative\u2019s introduction, in late October 2025, and the end of the year. But it is improbable that any significant number of billionaires fully cut ties with California in that short period.<\/p>\n Critics of the ballot measure have voiced concerns that even a small number of billionaires leaving the state would lead to lower state tax revenues overall. Their math doesn\u2019t add up. California\u2019s billionaires currently pay such a low tax rate that even if all of them left the state, it would take 25 years for the loss of their tax payments under the current set of rules to surpass the amount the state would raise if the one-time tax succeeds this fall.<\/p>\n What if the billionaires left California? <\/p>\n While billionaires who no longer run their businesses day to day may choose to eventually leave California, uprooting an established business that relies on the pool of California\u2019s tech talent and tech ecosystem would be much harder: While Mr. Page and Mr. Brin may leave for Florida or Nevada, there are no discussions of Google leaving Mountain View.<\/p>\n California\u2019s tech sector produces billionaires faster than any other state\u2019s. Its superrich \u2014 who have benefited from the state\u2019s infrastructure, universities and networks of people and businesses \u2014 have accumulated enormous fortunes almost tax-free. The proposed billionaire tax would finally make them contribute in modest proportion to their gains. In November, California\u2019s voters should show the nation the way forward.<\/p>\n Methodology and sources<\/p>\n Our research<\/a> tracks California billionaires\u2019 wealth using the lists of U.S. billionaires compiled by Forbes annually since 1982 and daily since 2019. For the four richest Californians (Mr. Brin, Mr. Huang, Mr. Page and Mr. Zuckerberg), we estimated income, wealth gains and taxes paid on their company wealth (Alphabet, Meta and Nvidia) using publicly available Securities and Exchange Commission data for stock ownership, stock sales, stock donations and stock option exercises and Compustat data for dividends (prorated to their stakes) and executive compensation. For the top four, company wealth was 97 percent of their total Forbes wealth at the end of 2025. California income taxes paid by all California billionaires are estimated using California income tax administration tabulated statistics and an extrapolation calibrated from Balkir et al. (2025)<\/a>, a national study on taxes paid by billionaires. Data for the line and bar charts is through May 7, 2026.<\/p>\n Source photographs by Mike Blake\/Reuters; Kimberly White\/Getty Images; Jamie McCarthy\/Getty Images; Jordan Strauss\/Invision, via Associated Press; Elizabeth Frantz\/Reuters; Fabrice Coffrini\/Getty Images; Bruce Bennett\/Getty Images; Kenny Holston\/The New York Times; Mike Cohen\/The New York Times; Mike Blake\/Reuters; Jay L. Clendenin\/Los Angeles Times, via Getty Images; Chelsea Lauren\/Getty Images for Joan Dangerfield; Amy Sussman\/Getty Images for LACMA; Peter DaSilva\/The New York Times; Richard Drew\/Associated Press; Carolyn Fong\/The New York Times; Alex Welsh\/The New York Times; Kelsey McClellan\/The New York Times; Justin Sullivan\/Getty Images; Fred Prouser\/Reuters; Kendrick Brinson\/The New York Times; Krista Schlueter\/The New York Times; Robert Stolarik\/The New York Times; Jutharat Pinyodoonyachet\/The New York Times; Jim Wilson\/The New York Times; and Monica Almeida\/The New York Times.<\/p>\n","protected":false},"excerpt":{"rendered":"By Emmanuel Saez and Gabriel Zucman Mr. Saez is an economist at the University of California, Berkeley. 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