LeBron James is leaving the Lakers for Philadelphia this summer, and the timing has thrust the NBA’s first active billionaire into the middle of one of the most closely watched tax fights in the country: California’s Proposition 40, a one-time 5% wealth tax on the state’s roughly 200 billionaires headed for the November 2026 ballot.
A closer look at James’ situation illustrates just how complicated—and possibly futile—fleeing California has become for the ultra-wealthy this year.
A tax that doesn’t care where you live now
Proposition 40’s mechanics are unforgiving. The measure uses a hard, all-or-nothing residency snapshot: anyone who lived in California on January 1, 2026 owes the tax, full stop, with no proration for leaving mid-year. Net worth is then valued as of December 31, 2026—meaning even James’s move to Philadelphia this summer wouldn’t retroactively undo his California residency status on the trigger date.
That provision has already drawn a constitutional challenge. Rep. Kevin Kiley has introduced federal legislation attacking the measure, arguing it’s fundamentally unfair to tax “someone who no longer lives” in the state. Tax attorneys have raised similar Dormant Commerce Clause concerns, predicting the law will face legal battles well past November regardless of the vote’s outcome.
