By Fatma Younis
Californians voted Tuesday on Proposition 40, a first-in-the-nation ballot measure that would impose a one-time 5% tax on the net worth of residents with assets exceeding $1 billion. Most revenue would replace federal healthcare funding cuts.
Measure Details
The proposal targets about 150 billionaires in the state. If passed, California would become the first state to tax billionaire net worth directly. The tax is backed by the labor union SEIU United Healthcare Workers West, which estimates the state will lose $100 billion in federal healthcare funding over five years.
Opposition and Support
Democratic Gov. Gavin Newsom warns the tax would drive wealthy residents out of California, eroding the tax base. Vermont Sen. Bernie Sanders frames it as a step toward reducing wealth inequality. However, some traditional Democratic allies, including Planned Parenthood and the California Teachers Association, oppose the measure over concerns about revenue allocation and potential budget impacts.
Funding and Spending
The campaign against the measure has raised roughly ten times more than supporters, with major contributions from tech moguls such as Google co-founders Sergey Brin and Larry Page, and Meta CEO Mark Zuckerberg. Brin has contributed about 30% of the $333 million raised by the opposition political action committee Building a Better California. Some billionaires have already begun cutting ties with the state.
Polling and Voter Sentiment
A mid-October Public Policy Institute of California poll showed 52% of likely voters opposed the measure, while 46% supported it, a reversal from early September when support led. Voters are divided, with some citing healthcare benefits and others doubting the tax's effectiveness.
Potential Legal Challenges
Even if approved, the measure could be blocked by two competing ballot initiatives that would ban new taxes on financial assets and personal property. Those initiatives, backed by the same opposition committee, need more "yes" votes than Proposition 40 to nullify it.
