California Ballot Will Decide One-Time 5% Tax on Billionaires

Overview

• Proposition 40 would levy a one-time 5% tax on Californians with more than $1 billion in covered assets to raise tens of billions for Medi-Cal and other services.
• Opponents have qualified two countermeasures, Propositions 41 and 42, that could block or limit Prop 40 and the measure with the most 'yes' votes would determine which rules apply.
• The nonpartisan Legislative Analyst’s Office estimates Prop 40 would produce a near-term revenue spike but warns it could reduce future income-tax collections if wealthy residents move or change behavior.
• Campaign dynamics are sharply uneven: the Yes on 40 campaign released an internal poll July 30 reporting 57% support, while opposition groups, including Governor Gavin Newsom’s Stop the Squeeze effort, have reported far larger fundraising totals.
• Coverage shows a deep split in arguments with backers saying the tax replaces federal cuts and protects care for patients and workers, and critics saying it could tax unrealized startup or IP value and harm California’s innovation economy.