California's Proposition 40, a measure on the November 3 ballot, proposes a one-time 5% wealth tax on billionaires who were residents of the state as of January 1, 2026, with the tax due in 2027 and payment options spread over five years at an additional cost. The tax would generally exclude real estate, pensions, and retirement accounts from its calculation [1].
Entrepreneur Eric Schiffer, chairman of Patriarch and CEO of Reputation Management Consultants, voiced strong concerns about the measure, warning that it could trigger a 'giant sucking sound' as wealthy entrepreneurs and business leaders leave California. Schiffer, who works with several billionaire clients, stated that many are unhappy with the proposal and feel 'under attack,' predicting that the state could lose some of its most successful and innovative residents if the tax is implemented [1].
Schiffer argued that the departure of billionaires could have far-reaching consequences for California's economy, including the loss of businesses, jobs, investment, and tax revenue. He emphasized that the impact would not be limited to the ultra-wealthy, suggesting that working individuals could face reduced economic opportunities as a result of entrepreneurs relocating out of state [1].
The measure has received endorsement from the California Democratic Party, while some prominent leaders, such as Governor Gavin Newsom, have expressed opposition. California Republican gubernatorial candidate Steve Hilton has also warned that the billionaire tax could further strain the state's economy [1].
A supporter with the Billionaire Tax Now coalition was seen holding a placard during a media briefing in Los Angeles on April 27, 2026, highlighting ongoing public debate around the proposal [1].
CONCLUSION
California's proposed billionaire wealth tax has sparked significant debate, with critics warning of potential business and talent flight from the state. The measure's outcome could have major implications for California's economic landscape, affecting not only the wealthy but also broader employment and investment opportunities.