California voters are deciding on Tuesday, Nov. 3, whether to tax the net worth of the state's billionaires. The measure, Proposition 40, has drawn heavy spending from both sides. Results were not in when this story was published.
The measure would impose a one-time 5 percent tax on the net worth of people who were California residents on Jan. 1, 2026, and are worth more than $1 billion. The tax would be due in 2027, according to the state's nonpartisan Legislative Analyst's Office. Taxpayers could spread payments over five years if they pay more. Real estate, pensions and retirement accounts would generally be excluded.
Ninety percent of the money would have to go to public health care services. The rest would go to education, food assistance and running the tax. Supporters, led by the labor union SEIU United Healthcare Workers West, say the money is needed to replace federal health care cuts. The union estimates the state will lose $100 billion in federal health funding over five years, the Associated Press reported.
The measure has split Democrats. Vermont Sen. Bernie Sanders campaigned for it. Gov. Gavin Newsom opposes it. Planned Parenthood and the California Teachers Association are among traditional Democratic allies in the opposing coalition. The "no" side has raised roughly 10 times as much as the "yes" side.
The Legislative Analyst's Office says the state would probably collect tens of billions of dollars, spread over several years. Ongoing income tax revenue could drop by less than $1 billion a year if some billionaires leave. A mid-October Public Policy Institute of California poll found 52 percent of likely voters opposed and 46 percent in favor, which reversed the result of its September survey.
Even if Proposition 40 passes, it could still be blocked. Propositions 41 and 42 could cancel it out if either one passes with more "yes" votes.
Official results take time, and every vote must be counted and certified before races are final.
Sources: Associated Press, PBS News, California Legislative Analyst's Office, Public Policy Institute of California