Among 14 propositions on the ballot in California this November, Proposition 40 would be directed to California\u2019s healthcare system with a one-time 5% tax on the wealth of the state\u2019s billionaires.<\/p>\n
What is in Prop 40 and who is behind the measure?<\/p>\n
Championed by SEIU United Healthcare Workers West, Prop 40 is a one-time 5% tax on anyone with a net worth of more than $1 billion living in California. <\/p>\n
If passed, the proposal is estimated to generate around $100 billion in additional revenue for California over the next five years. <\/p>\n
The initiative would create a special state reserve, with 90% of funds directed toward healthcare, including Medi-Cal and healthcare access programs.<\/p>\n
\u201cThis one-time emergency tax, most of it goes to healthcare because that\u2019s where the biggest cuts were,\u201d referring to the federal cuts to Medicaid funding, said Kris Charisma-Primm, head of partnerships for the Yes on Prop 40 campaign. <\/p>\n
The remaining 10% of funds would support K-14 public education and food assistance programs, such as CalFresh, school-based nutrition programs and community food assistance efforts.<\/p>\n
Among Prop 40\u2019s supporters include Vermont Sen. Bernie Sanders, the Democratic Party of California, the California chapter of the Democratic Socialists of America, the California Nurses Association and Teamsters California.<\/p>\n
\u201cThe same billionaires driving up the costs of housing, groceries, and utilities want their workers to pay more for healthcare every time we sit down at the bargaining table,\u201d said Peter Finn, co-chair of Teamsters California, in a statement to Annenberg Media. <\/p>\n
\u201cTeamsters California was the first major labor union to endorse the California Billionaire Tax and we stand by that; we will not back down as big tech billionaires attempt to bully their way into the ballot box and continue to rig the system against working people,\u201d Finn said.<\/p>\n
The state of California\u2019s healthcare system<\/p>\n
The One Big Beautiful Bill Act, which Congress passed last July, cut more than $1 trillion from federal healthcare spending over the next decade. The California Department of Health Care Services<\/a> estimates that California is expected to lose approximately $30 billion each year in healthcare funding. <\/p>\n According to the California Budget & Policy Center<\/a>, nearly one in three people rely on Medi-Cal, the state\u2019s Medicaid program. <\/p>\n Cuts to federal healthcare spending threaten the closure of emergency rooms and hospitals statewide, especially those in rural and underserved areas that depend on Medi-Cal reimbursements. <\/p>\n Public Citizen identified 83 hospitals, including 5 in L.A., that are currently at high risk of closure or significant cuts in service.<\/p>\n Healthcare workers also face job insecurity resulting from a slash in funding for hospitals, clinics, long-term care facilities and behavioral-health services.<\/p>\n \u201cWe\u2019re coming out of COVID, where we were banging pots and pans in the street for healthcare workers, and now we might just fire 150,000 of them,\u201d Charisma-Primm said.<\/p>\n The opposition: who is against it?<\/p>\n There are two propositions on the ballot competing against Prop 40: Proposition 41 and Proposition 42.<\/p>\n Prop 41, spearheaded by Californians for a More Transparent and Effective Government, would require pre-election audits for ballot initiatives proposing special taxes, such as the Billionaire Tax, when they report collecting 25% of the required signatures.<\/p>\n Another tax law led by Protect Retirement & Life Savings, Prop 42 would prohibit taxes enacted by law or a constitutional amendment beginning on or after Jan. 1, 2026, on the ownership or control of individually-owned assets and other forms of personal savings, as well as prevent retroactive taxes on conduct, activities or status prior to the effective date of the legislation. <\/p>\n If either Prop 41 or Prop 42 pass by a higher margin than Prop 40, the result of the wealth tax would be voided. <\/p>\n Prop 42 has received endorsements from the California Small Business Association, California Taxpayers Association and Reform California.<\/p>\n The committees for both propositions are backed by Building a Better California, which has received a majority of its funding from Google co-founder Sergey Brin, who has a net worth of $267.2 billion according to Forbes<\/a>, leaving him impacted by the wealth tax proposal if passed.<\/p>\n The California Teachers Association, California State Council of Laborers, California Business Roundtable, California Medical Association and California Chamber of Commerce are among the unions and organizations opposing the tax.<\/p>\n \u201cProp. 40 also repeats a cruel and irresponsible cycle, in which the state commits temporary, one-time revenues toward ongoing needs only to slash services and programs when funds run dry,\u201d the No on Prop 40 campaign said in a press release<\/a>. <\/p>\n \u201cPatients, providers, and healthcare programs need reliable, sustainable investment, not a short-term scheme that makes future budget cuts inevitable.\u201d<\/p>\n California gubernatorial candidates Democrat Xavier Becerra and Republican Steve Hilton, as well as Gov. Newsom, have spoken out against the measure.<\/p>\n \u201cI understand the anxiety driving the wealth tax proposal in California,\u201d Newsom wrote in a post on Substack<\/a>. \u201cBut I\u2019m voting no because this measure dedicates almost all of the revenue it raises to a single category of state spending.\u201d <\/p>\n \u201cThere is nothing for housing, nothing for childcare, nothing for public safety workers who must answer 911 calls, and nothing for our public universities that have powered California\u2019s economy for a decade,\u201d Newsom said, instead advocating for a nationwide billionaire tax. <\/p>\n Other concerns include that if Prop 40 passes, billionaires will change their primary residences to other states to avoid paying the tax, resulting in a loss of revenue for California.<\/p>\n \u201cThe billionaires who are leaving have created tens to hundreds of thousands of jobs in California, and while those jobs won\u2019t go away overnight, if the founders are gone, the billionaire tax will accelerate the shift of jobs to other states that we\u2019re already seeing,\u201d said Joshua Ruah, an economist and professor at the Stanford Graduate School of Business in an interview with KQED<\/a>.<\/p>\n