Advisory Brief: California’s Proposed Billionaire Tax
Major shifts in tax policy are a natural prompt for giving conversations. Here’s what advisors need to know about Proposition 40, and how to discuss the right charitable giving options.
980,438
valid signatures certified for the November 3, 2026 ballot
$1B+
net worth threshold that would trigger the tax
~200
Californians directly affected
5%
proposed one-time tax rate on net worth above the threshold
Assets Already at the Center of These Conversations
Each of these asset types requires a DAF sponsor with the operational capability to accept, hold, and administer complex contributions. Ren’s partnering sponsoring charities can accept each of these asset types.
Pre-IPO and private company stock
Founders are considering how charitable giving fits into pre-liquidity planning.
Appreciated real estate
Charitable remainder trust structures are often a natural starting point for the planning conversation. Charitable remainder trust structures are often a natural starting point for the planning conversation.
Venture fund and private equity interests
Sophisticated DAF sponsors are equipped to accept and hold these positions.
Concentrated public equity positions
These remain among the most common complex-asset DAF contributions.
Shifting the Philanthropic Conversation
The conversation advisors have been having: “Should I give after liquidity?”
The conversation happening now: “Should we think about how charitable giving fits into my overall planning picture?”
That shift is the planning opportunity. Advisors who are part of these conversations now, before the ballot outcome is known, will be better positioned to serve clients regardless of what the vote produces.
The Proposal, Plainly Stated
There is no California billionaire tax currently in effect. What the industry is tracking is the proposed California Billionaire Tax Act, now formally designated as Proposition 40, which qualified for the November 3, 2026 ballot with 980,438 valid signatures. The June 25, 2026 deadline for a legislative withdrawal passed without a deal, so the measure is confirmed for voter consideration.
The measure would impose a one-time 5% tax on the net worth of California residents with more than $1 billion in wealth, affecting approximately 200 people. It applies based on the January 1, 2026 residency deadline.
Two counter-initiatives backed by a coalition of tech billionaires also qualified for the same ballot; one could effectively nullify Proposition 40 even if it passes. The outcome is genuinely uncertain on multiple fronts, and Ren isn’t in the business of predicting it.
Why a Wealth Tax Changes the Conversation
This is the distinction advisors most need to understand before client conversations begin. Traditional charitable deductions reduce taxable income. A wealth tax is imposed on net worth, not income, and the familiar ways charitable giving interacts with income taxes don’t automatically carry over to a wealth tax framework.
How Proposition 40 would interact with specific charitable vehicles — DAFs, charitable remainder trusts, private foundations — depends on Franchise Tax Board rulemaking, Attorney General interpretive guidance, and case law that won’t exist until well after the vote. That’s exactly why this is worth discussing early, rather than assuming any particular approach will or won’t apply.
The Broader Political Landscape
Opposition to Proposition 40 is broader than billionaires versus labor. Opponents have raised more than $120 million, and prominent progressive organizations, including Planned Parenthood Affiliates of California, the California Medical Association, and the California Teachers Association, have also come out against it. The political landscape is genuinely fractured.
For philanthropy, the longer-term concern is donor migration. At least six billionaires left California before the January 1, 2026 residency deadline, taking an estimated $27 billion in potential revenue with them. If more follow, charitable capital could shift away from California causes over time.
For advisors, this isn’t a reason to avoid the planning conversation; it’s a reason to have it earlier, before a client makes a residency decision that fundamentally changes the planning equation.
At a Glance
| Question | What we know |
|---|---|
| What is it? | A one-time 5% tax on net worth over $1 billion for California residents (as of Jan 1, 2026) |
| Ballot status | Qualified for the November 3, 2026 ballot; 980,438 valid signatures certified |
| Who's affected? | Approximately 200 people |
| When would it apply? | Based on the January 1, 2026 residency deadline |
| Is it final? | No. It's a ballot measure, not enacted law. Competing initiatives also qualified for the same ballot. |
| How would it interact with DAFs, CRTs, or private foundations? | Not yet defined — this depends on Franchise Tax Board rulemaking and Attorney General guidance that won't exist until after the vote |
Your Clients are Already Thinking About This
The question is whether you’re part of the conversation before they decide. Ren powers more than 60% of donor-advised fund programs in the United States, giving us an early read on how charitable planning behavior shifts when the policy landscape changes. We’re tracking Proposition 40 closely and will share what we learn as the picture develops.
