California Wealth Tax

Extracted Attributes

• Tax Rate

  5% of net worth

• Frequency

  One-time tax

• Asset Scope

  Worldwide assets, excluding real estate, pensions, and retirement accounts

• Official Name

  2026 Billionaire Tax Act

• Payment Terms

  Due in 2027; option to spread over five years with a fee

• Wealth Threshold

  $1,000,000,000 (1 billion USD)

• Estimated Taxpayer Base

  200 to 250 households

Timeline

• Date on which the net worth of billionaires is assessed for the tax calculation. (Source: LA Times / CNBC)

  2025-12-31

• Residency deadline; individuals residing in California on this date are legally subject to the one-time wealth tax. (Source: California Department of Justice / Legislative Analyst's Office)

  2026-01-01

• Potential date for the Billionaire Tax Act to appear on the California general election ballot. (Source: CNBC)

  2026-11-03

• The year the tax payment becomes due for eligible residents. (Source: Legislative Analyst's Office)

  2027-01-01

Andersen Tax

Andersen Tax LLC is a tax firm headquartered in San Francisco, California, United States. It provides tax, valuation, financial advisory and consulting services to individuals and corporate clients. As of 2015, Andersen Global has a presence in 179 countries.

Web Search Results

• [PDF] Expert Report On The California 2026 Billionaire Tax: Revenue ...

  as annual wealth taxes on homes, land, and some business property. This measure stays within that well‑established framework. It taxes only those who are California residents (or part‑year residents) as of January 1, 2026, and it offers credits for similar taxes paid to other jurisdictions to reduce the risk of multiple taxation. Can California tax the worldwide wealth of California residents? In general, yes. California is permitted to do so by both the federal and state constitutions, and California already taxes its residents on their worldwide income, for example, dividends from stock or profits from a business located in another state or country, so long as the person is a California resident. This measure does the same thing with extreme wealth. It applies to the net worth of [...] wealthy do not generally move because of taxes. However, to be extra cautious, the proposed tax is structured as a one-time tax precisely to eliminate incentives to avoid the tax by leaving the state. Will billionaires be deterred from coming? No, billionaires establishing residency in California after January 1, 2026 will not be required to pay the tax. Won’t the wealthy be able to hide their wealth and evade the tax? The proposal includes a number of strong provisions to make evasion quite difficult. The wealth tax base is comprehensive with few exclusions.7 Taxable wealth includes worldwide assets. Therefore, CA billionaires cannot avoid the wealth tax by moving their assets outside of California. Owning wealth indirectly through trusts or corporate shells will not generally reduce [...] a taxpayer with $1 billion (or less) pays no tax, a taxpayer with $1.02 billion pays a tax rate of 1%, a taxpayer with $1.04 billion pays 2%, a taxpayer with $1.06 billion pays 3%, a taxpayer with $1.08 billion pays 4%, a taxpayer with $1.1 billion (or more) pays 5%. The Forbes real-time billionaire list has only 1 single California billionaire with wealth between $1 billion and $1.1 billion so this ramp-up is not substantively important. If some California billionaires get upset at having to pay 5% of their wealth in tax and leave the state, won’t this be detrimental to future tax revenue in California? There is no economic incentive to move as any resident as of January 1st, 2026 has to pay the tax in full. Furthermore, as noted above, studies of how the super wealthy respond to tax

• [PDF] 25-0024A1 (Billionaire Tax) - California Department of Justice

  or the broader taxpayer base. See Brian Galle, David Gamage, and Darien Shanske, Money Moves: Taxing the Wealthy at the State Level, 113 California Law Review 635 (2025). (w) Since the 1980s, the wealth of billionaires has grown by an average 7% each year, vastly outpacing the growth in wages and savings for ordinary Californians. The collective wealth ofCalifornia billionaires has surged from $300 billion in 2011 to $700 billion in 2019 to over $2 trillion in 2025. The wealth tax imposed by this Act would only modestly slow this explosive growth, collecting less than the billionaires typically gain in just a single year. California billionaires, even after paying the tax, will continue to amass ever­ rising fortunes. (x) According to leading economists, billionaire wealth is more [...] Paper No. 34170 (2025). (t) A wealth tax is not a new concept under California law; narrower and less progressive wealth taxes are already paid by wealthy and low-income Californians alike. These taxes include the annual Vehicle License Fee, a tax based on 0.65% of the value ofa vehicle, and the annual property tax on housing ofabout l % on the assessed value of a house. (u) The immense and growing fortunes ofbillionaires bring privileges inaccessible to most. Whereas nurses, teachers, firefighters, and tech workers alike pay taxes on nearly all oftheir earned income, billionaires can shield enormous sums from taxation. Their primary assets-stocks, businesses, real estate­ grow in value year after year, but because this growth is taxed only at sale and billionaires often need not sell, [...] billionaires in the State. (e) The Act is intended to treat similarly situated taxpayers and assets similarly, except to the extent that sound tax policy requires otherwise. Sec. 4. Section 37 is added to Article XIII of the California Constitution, to read: Sec. 37. (a) This Section authorizes and enables a one-time tax on the accumulated wealth ofCalifornia billionaires, imposed on those individuals who are California residents within the meaning of Sections 17014 and 17015 .5 ofthe Revenue and Taxation Code as ofthe tax obligation date as defined in the 2026 Billionaire Tax Act. (b) The following definitions apply to this Section: (1) "Act" refers to the 2026 Billionaire Tax Act. (2) "Reserve Fund" refers to the 2026 Billionaire Tax Reserve Fund, created by this Act. (c)

• Yes, California should tax billionaires' wealth. Here's why

  The measure would exempt directly held real estate, pensions and retirement accounts from the calculation of net worth. The tax can be paid over five years (with a fee charged for deferrals). It applies to billionaires residing in California as of Jan. 1, 2026; their net worth would be assessed as of Dec. 31 this year. The measure’s drafters estimate that about 200 of the wealthiest California households would be subject to the tax. [...] But it may be that California’s ability to tax billionaires’ income has been pretty much tapped out. Some have argued that one way to obtain more revenue from wealthy households is to eliminate any preferential rate on capital gains and other investment income, but that’s not an option for California, since the state doesn’t offer a preferential tax rate on that income, unlike the federal government and many other states. The unearned income is taxed at the same rate as wages. [...] Californians have recently voted to redress the increasing inequality of our tax system. Voters approved what was dubbed a “millionaires tax” in 2012, imposing a surcharge of 1% to 3% on incomes over $263,000 (for joint filers, $526,000). In 2016, voters extended the surcharge to 2030) from the original phase-out date of 2016. That measure passed overwhelmingly, by a 2-to-1 majority, easily surpassing that of the original initiative. Advertisement Voices ### Hiltzik: With a $300-million donation to Harvard, a hedge fund billionaire shows why we need a wealth tax Hedge fund billionaire Ken Griffin made a $300-million gift to Harvard, his alma mater. It’s the kind of faux-generosity the ultra-rich rely on to avoid paying their fair share of taxes.

• California wealth tax proposal leaves billionaires with little way out

  The proposed California billionaire tax includes a special provision that makes it highly unlikely that anyone who wants to leave the state could avoid paying, according to tax attorneys. The Billionaire Tax Act, which could be added to the state's general election ballot in November, would impose a one-time tax of 5% on the total wealth of California tax residents whose net worth is $1 billion or more. While new taxes typically take effect after they're approved, the proposed billionaire tax would apply to those who are California residents as of Jan. 1, 2026. The retroactive date left little time for California's estimated 200 to 250 billionaires to change their tax residency after they first learned of the potential tax in December. [...] Changing residency or claiming non-residency for tax purposes can also trigger a second set of rules. A California taxpayer, for instance, has to not only buy a home or sign a lease in another state, but also prove they live there – through family photos, heirlooms and other signs of a true primary residence. A change of residency must occur before the taxable event, whether it's a wealth tax or liquidity event. "Intent is critical," Manes said. "You have to show you intended to leave California indefinitely, permanently." Because establishing a change of residency takes time – typically months – attorneys say successfully escaping the proposed California wealth tax would be almost impossible. "On its face, the ship has sailed," Manes said. [...] Yet attorneys say the aggressive timeline will likely invite legal challenges. And, it highlights a growing question for California tech founders and investors: how to plan a quick move to a lower-tax state before a big liquidity event or company sale. With artificial intelligence driving a new wave of wealth creation in California – and adding an estimated 50 new billionaires last year – tax advisors in California said they were seeing a flood of new business even before the proposed wealth tax.

• New tax on the wealth of billionaires. [Ballot]

  ## Proposal One-Time Wealth Tax on Billionaires. Billionaires living in California on January 1, 2026 would have to pay a one-time state tax equal to 5 percent of their net worth. The tax would be due in 2027. Taxpayers would have the option to spread the payments over five years, but would have to pay more to do so. Real estate, pensions, and retirement accounts would be excluded from the tax. [...] ## Background California Is Home to Many Billionaires. Several of the wealthiest people in the world live in California. Wealth is the value of all the things a person has come to own over their lifetime. Wealth is different from income, which is how much a person earns in a set period of time, like one year. A person’s wealth typically is measured by their net worth. A person’s net worth is the value of all the things they own, like stocks, businesses, or other investments, minus their debts. By this measure, California is home to a few hundred people with wealth over $1 billion, often called billionaires. Many of these billionaires gained their wealth as executives or investors in California technology companies. ## Proposal