California billionaire tax: Proposition 40 heads to voters

California is one step away from the first billionaire tax in the United States. Proposition 40 applies to people with a net worth above $1 billion (about 22 billion crowns) who were permanent residents of the state on Jan. 1 of this year. The tax is expected to raise $100 billion, or more than two trillion crowns.

Who is affected

“I believe this is the first billionaire tax, meaning a wealth tax aimed at an extremely narrow group of rich people,” said Francesco Trebbi, a professor of public policy at the University of California, Berkeley. According to Forbes, such a tax would be a first in the U.S. The BBC reports that more than 200 people would be affected.

California has one of the highest concentrations of wealthy people in the world. Companies such as Apple, Google, Nvidia and Meta grew up in Silicon Valley, and their founders, employees and investors made billions of dollars as the companies' value rose. Hollywood's film industry brings in more wealth. The state is the world's fourth-largest economy, yet it also has the largest share of homeless people in the U.S.

Who supports it and who opposes it

The initiative was pushed forward with the help of a health care workers' union. Suzanne Jimenez, head of the union's office, called the tax a short-term fix for the cuts that President Donald Trump's tax and spending package will bring. “If we do nothing, our health care system will collapse while we look for a longer-term solution,” she told the BBC.

The tax needs a majority of votes to pass, and 13 percent of voters are still undecided. Meanwhile, at least six California billionaires have reportedly left the state before the cutoff date, among them Google co-founder Sergey Brin. According to the Los Angeles Times, he gave more than $100 million (over two billion crowns) to an organization that funds campaigns against the tax.

Around Prague, based on reporting by novinky.cz