By Basant El-Faramawy
California voters are weighing in on Proposition 40, a ballot initiative that would impose a one-time 5% tax on the wealth of individuals and trusts with assets exceeding $1 billion. The measure, which requires a simple majority to pass, targets roughly 200 billionaires in the state and aims to generate tens of billions of dollars for healthcare, food assistance, and public education programs.
What Proposition 40 Proposes
The Legislative Analyst’s Office estimates the tax would raise tens of billions in revenue, primarily to offset healthcare cuts enacted under federal tax legislation. Results from the November 3, 2026, election will determine whether the measure becomes law.
Proponents Argue Tax Addresses Funding Cuts
Supporters, including Senator Bernie Sanders and Representative Ro Khanna, say the tax would enlist the state’s wealthiest residents to help ease the cost burden on public assistance programs that have faced recent federal and state cuts. They argue the revenue is urgently needed as low- and middle-income Californians struggle with rising healthcare and living costs.
Critics Warn of Billionaire Exodus
Opponents contend the measure would drive billionaires out of California, ultimately reducing long-term tax revenue. They also caution that a first-of-its-kind wealth tax could face legal challenges and uncertain consequences. Governor Gavin Newsom, the measure’s most prominent opponent, has advocated instead for a national billionaire tax focused on loans against assets.
Prominent Figures Split on Measure
The campaign has drawn significant funding from both sides. The Yes on 40 coalition has raised over $30 million, largely from the Service Employees International Union-United Healthcare Workers West. The opposition group Building a Better California has amassed hundreds of millions, with top contributions from Google co-founder Sergey Brin and venture capitalist John Doerr. Some tech leaders, such as Nvidia CEO Jensen Huang, have expressed openness to the tax, with Huang stating he is "perfectly fine" with whatever taxes California applies.
