California votes on Proposition 40, a one-time 5% tax on billionaires' assets

What California voters decide

Californians vote on Tuesday, 3 November, on Proposition 40, a one-time 5% tax on the assets of residents whose wealth exceeds $1 billion. It is one of 14 state referendums on the California ballot, part of a wider set of 147 measures in 39 states voted on alongside the midterm elections. The midterms will also decide the House of Representatives and a third of the Senate. Taxable assets include company stakes, financial securities, art, collectibles and intellectual property, while real estate and certain pension savings are excluded. Estimates of how many residents would be affected range from a few hundred to about 250 billionaires.

Backers and their argument

The initiative was filed by SEIU-United Healthcare Workers, a union representing health workers, whose California chair Dave Regan drafted the tax with economists such as Emmanuel Saez and Robert Reich. Supporters present it as a response to the tax and spending law passed under Donald Trump's second administration, which cut taxes for the wealthiest and spending on Medi-Cal, the state program that finances low-cost medical care for the poorest residents. The union reports that more than 1.6 million signatures were collected within the 180-day window required to qualify. Backers estimate the measure could raise over $100 billion, with 90% directed to the health system and the remaining 10% to education and food assistance. Senator Bernie Sanders and six Nobel economists, among them Paul Krugman, Joseph Stiglitz and Daron Acemoglu, have endorsed it. In an open letter, the economists note that billionaire wealth in California has more than tripled over the past decade to a total of $2.3 trillion, while their income tax between 2019 and 2025 amounted to 1.6% of the growth in that wealth.

Opposition and rival measures

Governor Gavin Newsom, a Democrat seen as a possible 2028 presidential candidate, opposes the tax and argues that wealthy residents would leave the state if it passes. A Stanford University study cited by El Periódico says at least seven ultra-rich people, including Larry Page, Sergey Brin, Peter Thiel and Steven Spielberg, have moved to other states, and warns that a larger outflow could follow. Propositions 41 and 42 are backed by the No side, which includes several tech entrepreneurs who could be liable for the tax. Proposition 41 requires an audit of the tax's feasibility, a test that Proposition 40 would automatically violate because it was not designed to respect the state's annual spending limit. Proposition 42 bans taxes on personal property such as accounts, investments and art, the very assets Proposition 40 targets. If Propositions 41 and 42 win more yes votes than Proposition 40, they could block it even if it is approved.

Timing, revenue and polls

If approved, the tax would be payable in five instalments, and proponents estimate the revenue would arrive between 2027 and 2031. Liability depends on residence in California on 1 January 2026.

Most polls published so far show a slight lead for yes, a margin El Periódico says has been shrinking as the vote approaches. The measure would become a state law and a constitutional amendment if approved. The sources do not yet report a result, so the outcome remains open at the time of writing.