Billionaire Tax Splits California's Tech Founders
Proposition 40 would levy 5% on assets above $1 billion, and voters decide it November 3, 2026.
Updated on Nov. 2, 2026 in Startups
Live Poll
Should California impose a one-time 5% tax on residents with over $1 billion in assets?
Palmer Luckey, cofounder of Oculus VR and Anduril, says he is staying in California despite Proposition 40, a proposed one-time 5% tax on residents' assets above $1 billion. The measure goes to voters in the November 3, 2026 midterm elections, and its residency cutoff was January 1, 2026. This is a ballot measure, not an enacted law.
Why it matters
Luckey's decision to remain is a bellwether for how wealthy technology founders are responding to a proposed tax that would apply to their paper fortunes. Some billionaires, including Google cofounders Larry Page and Sergey Brin, have already moved business entities out of the state, which shows the tax is changing where founders register and live.
Proposition 40 applies a one-time 5% rate to assets above $1 billion, with a residency cutoff of January 1, 2026. Projected temporary revenue runs into tens of billions of dollars over several years, but the valuation method for illiquid holdings remains disputed.
The players
Palmer Luckey
Cofounder of Oculus VR, which Facebook acquired in a deal estimated at $2 billion, and of defense technology company Anduril, valued at $90 billion after an employee tender offer.
Larry Page
Google cofounder who has moved business entities out of California to Florida and Nevada ahead of the Proposition 40 residency cutoff.
Sergey Brin
Google cofounder who has moved business entities out of California to Florida and Nevada ahead of the Proposition 40 residency cutoff.
Travis Kalanick
Former Uber chief executive who changed his address to Austin, Texas.
Jensen Huang
Nvidia chief executive whose estimated $180 billion net worth makes him a prominent potential taxpayer under the measure.
The details
Proposition 40 would levy a single 5% charge on the assets of residents whose holdings exceed $1 billion, with eligibility set by residency as of January 1, 2026. Critics such as Luckey argue that the calculation groups illiquid and unsold assets into a fortune, so a founder's stake in a private company could be taxed on a valuation rather than cash on hand. Sponsors say proceeds would fund health care, education, and food assistance.
Timeline
January 1, 2026: Residency cutoff date for Proposition 40.
Last week: Luckey held a press conference announcing he is staying in California.
November 3, 2026: Voters decide Proposition 40 in the midterm elections.
The Tech Race
Luckey's decision to remain stands in contrast to the Page and Brin relocations to Florida and Nevada, which were made before the January 1, 2026 residency cutoff. The split shows that California's founders are not responding uniformly to Proposition 40, a dynamic that will shape where the state's largest private fortunes are registered.
If passed, Proposition 40 would apply to residents whose assets exceed $1 billion, so the direct effect falls on a small group of very wealthy Californians. Founders with large holdings in private companies, such as those valued in the tens of billions, would face the tax on those holdings regardless of whether they have sold them.
The takeaway
Watch the November 3, 2026 vote on Proposition 40, which will settle whether the measure applies at all. Track whether more founders file residency or entity changes before that date, since those moves will show how seriously the tax is being taken.
What happens next
Voters decide Proposition 40 on November 3, 2026, which will determine whether the one-time tax takes effect.
Further reading
For more on how founders are weighing their options, see Startups coverage across California.
Source note: This article includes information reported by Fortune.
Live Poll
Should California impose a one-time 5% tax on residents with over $1 billion in assets?
