California considers 5% wealth tax on billionaires; opponents fund campaign

California is considering Prop 40, a ballot initiative that would impose a one-time 5 percent wealth tax exclusively on the state’s billionaires. Several dozen billionaires have contributed substantial funds to oppose the tax and have threatened to relocate if the measure passes. Peter Thiel, one of the billionaires opposing the tax, has given $3 million to the No on 40 campaign and has called for other wealthy residents to leave California.

The initiative introduces significant regulatory risk for California, as wealthy individuals are spending large sums to protect their accumulated wealth. This opposition could potentially lead to capital flight from the state.