But winning a simple majority might not be enough for Prop. 40 to take effect. Propositions 41 and 42 have provisions that could void the wealth tax if either also passes and receives more yes votes.<\/p>\n
Prop. 41 would require the state auditor to review proposed special taxes before they\u2019re placed on the ballot and invalidate taxes that don\u2019t comply with the state spending limit, while Prop. 42 would prohibit new state personal property taxes.<\/p>\n
Thad Kousser, a professor of political science at the University of California, San Diego, said it poses a \u201ctriple challenge\u201d for the proponents of Prop. 40.<\/p>\n
\u201cThey don\u2019t know where the end zone is,\u201d he said. \u201cThey\u2019re going to have to both make an argument for a wealth tax that has split the progressive coalition, but also make an argument against two other initiatives that may be appealing to voters who see them probably for the first time when they open their ballots.\u201d<\/p>\n
A September poll conducted for The San Diego Union-Tribune<\/a> found the measure drawing more support than opposition from likely voters statewide, but still shy of a majority \u2014 with about 48% of respondents saying they would vote for it. The poll had a credibility interval of 4.6 percentage points.<\/p>\n Prop. 40<\/p>\n Prop. 40 would levy a 5% tax on individuals with more than $1 billion in net worth. Real estate and some pensions and retirement accounts, however, would be excluded. The tax would only apply to billionaires living in California as of Jan. 1, 2026, and those subject to the tax have the option of either paying it in full in 2027 or making annual payments for the next five years, which would have added interest.<\/p>\n The initiative was proposed as a solution to the looming budget crisis facing the state following President Donald Trump\u2019s \u201cBig, Beautiful Bill\u201d that makes major cuts to healthcare and food assistance. California could lose at least $30 billion in annual federal funding as a result, according to the California Budget and Policy Center.<\/p>\n The estimates of just how much money the tax will bring into California\u2019s coffers vary. Proponents claim that it will raise $100 billion. The nonpartisan Legislative Analyst\u2019s Office estimates its yield at \u201ctens of billions of dollars,\u201d but said it could also reduce ongoing state income tax revenues by less than $1 billion per year if billionaires decided to leave.<\/p>\n Without a way to fill the budget gaps, the measure\u2019s backers warn that some Californians on Medi-Cal could lose their coverage. Hospitals and community clinics that rely on federal revenues targeted by the cuts could also face closures, they argue.<\/p>\n Dave Regan, the president of SEIU United Healthcare Workers West and the architect of the tax, said in an interview that the tax would prevent a \u201chealthcare catastrophe\u201d in California.<\/p>\n \u201cWe\u2019re either going to watch this train wreck or we\u2019re going to pass Proposition 40,\u201d he said. \u201cIt\u2019s a solution to a problem that was put in all of our laps.\u201d<\/p>\n But opponents of the billionaires tax argue that the money would only temporarily stem the budgetary bleeding. The No on Prop. 40 coalition, which includes the California Medical Association, the California Teachers Association, the California Chamber of Commerce and Planned Parenthood Affiliates of California, positions the initiative on its website as a \u201cflawed, reckless tax.\u201d<\/p>\n Francisco Silva, the president and CEO of the California Primary Care Association, called Prop. 40 a \u201cgimmicky solution that doesn\u2019t really address the core issues in healthcare.\u201d<\/p>\n \u201cIt creates temporary revenues that don\u2019t really allow us to build the infrastructure to sustain it,\u201d he said.<\/p>\n Silva also raised concerns about the measure\u2019s \u201csafeguards and accountability.\u201d The tax revenue would be deposited into a reserve fund, but there is no specificity as to how the money will be spent beyond it being used for \u201chealth care funding\u201d and \u201ceducation-related and food assistance expenditures.\u201d The measure, however, does note that the money can\u2019t be used to replace existing state funds for healthcare, education or food assistance.<\/p>\n Other opponents of the tax, like Gov. Gavin Newsom, have raised concerns about Prop. 40 driving billionaires out of the state, which they said would hurt the state\u2019s tax base. The top 1% of California earners pay nearly 40% of the state\u2019s personal income tax<\/a>, and personal income tax makes up 61% of the state\u2019s general fund revenues<\/a>. The governor, who\u00a0is eyeing a potential presidential bid, recently called for a national wealth tax instead.<\/p>\n \u201cWealth is movable, and it shops for the state with the lowest taxes,\u201d Newsom wrote in a June Substack post. \u201cThe fight belongs at the federal level, where this broken system was created in the first place.\u201d<\/p>\n Regan, however, argues that it will give California five years to \u201cfigure out a long-term solution\u201d for healthcare funding. The labor leader also brushed off the claims it would push wealthy residents and businesses out of California, calling it a \u201cdisingenuous argument.\u201d<\/p>\n \u201cA one-time tax creates no incentive for billionaires to leave the state and we felt that was important,\u201d Regan said. \u201cWe wanted to take that issue away to the extent we control it. It doesn\u2019t stop them from making a dishonest argument, but it\u2019s not true.\u201d<\/p>\n![\"U.S.](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/10\/SJM-L-KHANNAPRES-08XX-14.jpg\")
U.S. Rep. Ro Khanna (D-Calif.), left, listens as SEIU-United Healthcare Workers West President Dave Regan speaks during a rally for Prop 40, also known as the \u201cBillionaire Tax,\u201d at the South Bay Labor Council headquarters on Aug. 18, 2026, in San Jose, Calif. (Dai Sugano\/Bay Area News Group)<\/p>\n
![\"Hundreds](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/10\/SJM-L-TAXMEASURES-0923-3.jpg\")
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