The reason is Proposition 40, a state ballot measure that would impose a one-time wealth tax on California's 250-odd billionaires primarily to backfill healthcare cuts by the Trump administration. Opponents argue that could prompt tech moguls and their venture capital backers to leave San Francisco -- if they haven't already -- taking their fortunes, tax dollars, and business interests with them.
The response from some Californians is "good riddance."
In a September poll by the Berkeley Institute of Governmental Studies, 45% of likely voters in California supported Prop 40, while 42% opposed it.
In recent years, Big Tech has cozied up with the Trump administration and dodged child-safety and antitrust scrutiny without many meaningful consequences beyond the occasional fine or slap on the wrist. All the while, tech stocks and start-up valuations have ballooned. Tech companies now account for almost 40% of the S&P 500.
That dynamic hasn't won the industry many fans: As their wealth and influence grow, distrust in large tech companies has hit a record high. In Gallup polling in 2026, 41% of U.S. adults said they have little or no trust in the sector.
"The ardent love affair between America, and particularly blue-state America, with tech has ended," says Margaret O'Mara, a historian of the industry at the University of Washington. Where the tech sector was long seen as a bastion of liberalism, progress, and utopian promises, many now see its billionaire leaders as 21st-century robber barons.
A breakup could get particularly messy in the Golden State, where the tech sector accounts for 73% of Californian billionaires' wealth. That is according to three University of California, Berkeley economists, two of whom, Emmanuel Saez and Gabriel Zucman, helped design Prop 40. They don't count the venture capital financiers on Sand Hill Road or some crypto and fintech CEOs at firms like Coinbase Global and Robinhood Markets.
The Prop 40 vote will be an indicator of whether tech's public-relations problem has consequences. Should the measure fail, history shows the tech industry may feel emboldened to expand its political influence further. If the proposition succeeds, expect industry leaders to question whether California is their long-term home while states like Florida and Texas wait in the wings as low-tax tech-and-crypto hubs.
"We are sending a national signal," warns Robert Lapsley, president of the California Business Roundtable. "That California is no longer a place where you want to come and be an innovator."
Deep-Pocketed Resistance
If Prop 40 wasn't about tech to begin with, it sure is now, after hundreds of millions of dollars have flowed into the campaign from Silicon Valley.
SEIU United Healthcare Workers West, California's healthcare union, conceived of Prop 40 last year to address the loss of Medicaid funding from President Donald Trump's sweeping 2025 tax and spending bill. The cuts could cause 1.3 million Californians to lose healthcare over the next four years, says the nonpartisan California Budget & Policy Center.
If Prop 40 passes, a billionaire residing in California as of Jan. 1, 2026, will pay a one-time tax of 5% of their fortune either upfront or in yearly installments. Saez and Zucman estimate the measure could raise about $100 billion. If all goes well, Saez would like to see a permanent annual billionaire tax at a more modest rate. He floated 1% in an interview with Barron's.
While business groups, several other unions, and even Gov. Gavin Newsom have coalesced against Prop 40, tech luminaries are doing the heavy lifting.
At the start of the year, Google co-founder Sergey Brin and former CEO Eric Schmidt helped found Building a Better California, a political action committee that has contributed $135 million to defeat the proposition, per campaign finance disclosures. The PAC has also spent roughly $212 million to fund two separate initiatives, Propositions 41 and 42, which would nullify Prop 40 if they win by a bigger margin.
The heavy spending may be worth it for Schmidt and Brin -- combined net worth some $300 billion, per Forbes data -- but it is also evidence of the exact financial and political might that many voters fear. But such campaigns have backfired in the past: In 2019, Seattle voters rejected a slate of City Council candidates backed by Amazon.com, which poured $1.5 million into the local race.
"Here in the Bay Area, we've been flooded with 'vote no' ads on the Big Tech platforms we maintain as our bosses and other billionaires put over a hundred million dollars into defeating the measure," says one Alphabet employee, speaking on condition of anonymity. "The fact that they can do this is also quite concerning."
Rank-and-file tech workers face a unique choice in the election. Nearly 100,000 Californians work for Nvidia, Meta Platforms, Google, and Salesforce alone, according to estimates from Revelio Labs. That is just a few of the tech companies run by the state's billionaires. In other words, a significant cohort of voters in bright-blue San Francisco will directly decide whether to tax their bosses, many of whom have been outspoken critics of Prop 40.
Politics aside, who hasn't had a boss they would have loved to see taken down a peg?
Economic Exodus or Idle Threats?
The implicit threat from Prop 40's billionaire opponents is that they will leave California altogether if the initiative passes. You know how the saying goes: If you bite the hand that feeds, the hand will buy a lakefront compound in Nevada -- or something like that.
Mark Zuckerberg, the CEO of Meta, made that ultimatum explicit. Zuck told a special committee of Meta's board in August that he would establish residency outside the state before the Nov. 3 election, according to a recent regulatory filing. Within a week, the board moved to create a new class of shares that will allow Zuckerberg to pay the tax without diluting his voting rights.
"We believe this share class will maintain our founder-led structure," said Susan Li, Meta's Chief Financial Officer. "It will expand our funding tools and give us flexibility to invest behind the unprecedented momentum we're seeing across every part of our business driven by AI."
Joshua Rauh, an economist at Stanford, and Benjamin Jaros, a researcher at the right-leaning Hoover Institution, most recently estimated Prop 40 would collect only $28 billion to $36 billion and permanently shrink the state's income tax revenue. The main reason for the disagreement is that no one knows who left the state before Jan. 1 or who will leave in the years to come.
To be sure, cities across America are salivating at the opportunity to pull start-ups and tech workers away from Silicon Valley, says Libby Schaaf, CEO of the Bay Area Council and the former Democratic mayor of Oakland.
"I can tell you, every big city mayor is looking to steal our talent," Schaaf says. "Every big city mayor is looking to steal our economic engine of innovation." Prop 40, she adds, would put California at a long-term disadvantage to other states.
California is faring just fine for now. Companies based in the state have attracted a record-shattering $371 billion in venture capital in 2026, per PitchBook, thanks in large part to the AI boom. The other 49 states have drawn $145 billion combined.
The real downside for the tech industry may be more subtle. Silicon Valley has thrived in part because successful entrepreneurs put their money and energy back into the tech ecosystem, says Nate, a tech founder who requested we omit his surname because of his role at a large software company. California has long had high taxes and pricey real estate, sure, but the state valued innovators who stuck around to help young founders. Prop 40 could disrupt that cycle, Nate argues.
"There's a little bit of, I wouldn't say souring on the Bay Area, but just kind of a feeling like they're not welcome," he says of the wealthiest friends in his network.
If the money pouring into Prop 40 opposition is any indication, the most powerful tech leaders won't pack their bags without a fight. In fact, the potential afterglow of victory on Election Day will embolden the industry to push for even more influence, predicts Dan Schnur, a veteran California political strategist.
Schnur sees echoes of TechNet, a lobbying group he assisted in the 1990s, which formed in opposition to a 1996 California ballot initiative to make shareholder lawsuits easier. Three decades after thwarting that ballot measure, the organization now has a legal center, a headquarters in Washington, and a PAC that has made political donations every cycle since 1998.
"Winning is always very motivational," Schnur explains. "In all likelihood, [Prop 40] is going to encourage this generation of tech leaders to become more politically involved going forward."
The bad news for the billionaires is that the proponents of Prop 40 won't quit either. If anything, Prop 40 has exposed a rupture in California that will widen in the years to come.
"If Prop 40 is defeated, its opponents should not take false comfort," Schnur says. "There are more billionaires in the world today than ever before. And billionaires are less popular than ever before."
Tech executives will have to reckon with that conundrum -- whether they leave California or not.
Comments