California’s billionaire tax faces a vote — and competing ballot measures

Proposition 40 is on California’s statewide ballot for 3 November. It would impose a one-off tax on billionaires who were residents of the state on 1 January 2026. The official voter guide describes the tax as 5% of net worth, although real estate, pensions and retirement accounts would generally be excluded. If enacted, it would be due in 2027, with an option to spread payments over five years at additional cost.

The proposal would direct 90% of the revenue to health care, with the remainder going to food assistance, education and administration of the tax. California’s legislative analyst estimates that it would raise tens of billions of dollars over several years, but says the amount is hard to predict, partly because asset values change and taxpayers could take steps to reduce their bills.

Supporters say the money is needed in the face of federal health-care funding cuts. Suzanne Jimenez, chief of staff of a union backing the measure, called it a “short-term solution” in an interview with the BBC. Governor Gavin Newsom opposes it, warning that wealthy residents could leave and take their future state income-tax payments with them. The legislative analyst says such responses would probably reduce state revenue by less than $1 billion a year.

A majority for Proposition 40 would not necessarily put the tax into effect. Two other measures on the ballot, Propositions 41 and 42, could prevent it from becoming law if either receives more yes votes and a court finds that it conflicts with Proposition 40, according to the official voter guide.