LeBron James may be moving out of Los Angeles, but California’s tax collectors might not be ready to say goodbye.
The NBA superstar recently informed the Lakers that he’ll suit up elsewhere for the 2026-27 NBA season, but the league’s first active billionaire who is headed to the Philadelphia 76ers has become the face of one of the country’s biggest tax battles: California’s proposed Proposition 40, a ballot measure that would impose a one-time 5% wealth tax on the state’s estimated 200 billionaires.
Under the proposed measure, simply heading to a new out-of-state team might not be enough to escape a potentially massive tax bill.
If California voters approve Proposition 40 this November, anyone who was a California resident on Jan. 1, 2026 would be subject to the one-time tax if their net worth exceeds $1 billion, even if they move out of the state later that year. The tax would be calculated using a person’s wealth as of Dec. 31, 2026, creating an unusual scenario in which someone who no longer lives in California could still owe the state millions.
This means James would be hit with a large tax bill.
Proposition 40 has already sparked legal and political backlash.
Rep. Kevin Kiley, an Independent, has introduced federal legislation challenging the measure, arguing California shouldn’t be able to tax people who no longer live there. Constitutional experts have also questioned whether the proposal could survive legal scrutiny under the Dormant Commerce Clause, setting the stage for what could become years of litigation if voters approve the measure.
The Dormant Commerce Clause is a legal rule that stops states from passing laws that discriminate against out-of-state business or place an unfair burden on national trade, even when Congress has not made a federal law on that topic.
California’s billionaire class appears divided over how to respond.
Some of the state’s wealthiest residents reportedly relocated before the Jan. 1 residency deadline, including Google co-founders Larry Page and Sergey Brin, investor Peter Thiel and Amazon founder Jeff Bezos. Luxury real estate brokers in Florida have described a rush among wealthy Californians seeking to establish residency outside the Golden State before tax deadlines take effect.
Others have collectively donated more than $336 million into 2026 political campaigns, underscoring just how much is at stake as Proposition 40 heads to voters in November, according to a recent Capital & Main investigation.
Supporters of the measure argue talk of a billionaire exodus is exaggerated. The initiative’s backers, led by SEIU-UHW, say only a small fraction of California’s roughly 200 billionaires have actually left and contend the one-time tax would generate funding for Medi-Cal, public education and food assistance programs.
As for LeBron, there is no indication taxes drove his decision to leave Los Angeles. ESPN reported that James wants to continue competing for championships, while his longtime agent, Rich Paul, has begun exploring opportunities around the league.
