California Proposition 40: One-time 5% tax on billionaires’ wealth
What it does. Proposition 40 would impose a one-time tax of up to 5% on certain taxpayers with covered assets valued over $1 billion. Covered assets include businesses, securities, art, collectibles and intellectual property, but exclude real property and some pensions and retirement accounts. Ninety percent of the revenue would go to health care and 10% to food assistance or education-related programs, and the revenue would be exempt from constitutional requirements for school funding, budget reserves and the state spending limit. [1] [2]
Official ballot question. Imposes one-time tax on certain taxpayers. Initiative constitutional amendment and statute. [1] [2]
If you vote yes
A YES vote on this measure means: The state would collect a one-time tax from billionaires equal to 5 percent of their wealth. [1] [2]
If you vote no
A NO vote on this measure means: The state would not collect a one-time tax from billionaires equal to 5 percent of their wealth. [1] [2]
What it would cost
The Legislative Analyst says the state “probably would collect tens of billions of dollars from the wealth tax” over several years, but “exactly when and how much the state would collect is very hard to predict.” Some billionaires may respond in ways that reduce income tax payments, which “probably would reduce state revenues by less than $1 billion per year.” Administration costs “could be tens of millions of dollars per year for several years,” paid from the new revenue. The two sides cite different numbers: supporters say it will raise about $100 billion, and opponents cite a study they say shows a $25 billion loss. [2] [1]
Both sides
Strongest case for
The official argument in favor, signed by representatives of SEIU-United Healthcare Workers West, Planned Parenthood of Pacific Southwest and an American Federation of Teachers local, says Proposition 40 “makes approximately 200 California billionaires pay a modest, one-time tax on their global wealth to keep local hospitals and ERs open and healthcare affordable for millions of Californians.” [1]
They argue the tax is fair: “You pay your taxes out of every paycheck, but billionaires pay much lower rates than working families.” They say it affects “a small group of people who together hold $2 trillion in wealth—most of which will never be taxed due to loopholes that favor the ultra-wealthy.” [1]
In their rebuttal they say it is limited and cannot be widened: “Prop. 40 is a BILLIONAIRE tax. It cannot be applied to anyone else,” and that opponents “have not put forth any viable solution” to replace health care funding. [1]
Strongest case against
The official argument against, signed by the presidents of the California Medical Association and the California School Boards Association and the CEO of the California Primary Care Association, says “a study by Stanford University economists found the tax will cost California $25 billion as the tax drives companies and wealthy residents out-of-state.” [1]
They also argue the measure has weak guardrails. It “exempts itself from voter-approved constitutional protections for schools, shortchanging classrooms over $3 billion annually,” and the authors say its backers “wrote it to give the State Legislature power to amend the measure—without voter approval.” [1]
They say “Prop. 40 taxes retirement accounts for the first time.” The official summary says covered assets exclude real property and some pensions and retirement accounts. The authors state that it is opposed by Governor Gavin Newsom and the Democratic and Republican candidates for governor. [1]
What neither side is saying
Context that bears on what this measure does or who it affects but that the arguments above do not address. These are sourced facts, not arguments for or against the measure.
- It could fail even with a majority of yes votes. The Legislative Analyst notes that if Proposition 41 or 42 on the same ballot receive more yes votes than Proposition 40, courts could find they conflict, and Proposition 40 “could be stopped from becoming law even if it gets yes votes from a majority of voters.” [2]
Editorial context, not the opinion of We Elect. Each point is a fact we found in a source we opened and read; where sources disagree or data are missing, we say so. How we choose these.
Follow the money
Contributions reported by committees registered to support or oppose Proposition 40. Major donors are those who gave $100,000 or more; where fewer than three did, up to five of the largest listed donors giving $5,000 or more are shown.
Supporting (Yes)
Total raised $33,554,577
Committees
- Yes on 40 - Billionaire Tax Now - No on 41 & 42 $32,974,998
- Tax the Ultra-Rich Now, YES on 3 & 40, NO on 41 & 42 $579,579
At least one of these committees also campaigns on California Proposition 3, California Proposition 41, California Proposition 42, so its money cannot be split by measure.
Major donors
| Service Employees International Union, United Healthcare Workers West Nonprofit 501(c)(5) | $22,077,899 |
| SEIU United Health Care Workers West Political Issues Committee | $7,733,164 |
| SEIU United Healthcare Workers West PAC | $2,000,000 |
| Alan Davis | $400,000 |
| Saikat Chakrabarti | $201,000 |
| Ross Boucher | $200,000 |
| California Labor Federation AFL-CIO | $200,000 |
| Service Employees International Union - United Healthcare Workers West | $160,906 |
| Hillary Perkins | $100,000 |
Linked donors file their own reports, which list where their money comes from.
Opposing (No)
Total raised $170,704,293
Committees
- No on Prop 40 - Doctors, Teachers, Small Businesses, Working Families and Public Safety Against the Reckless Wealth Tax Experiment $158,739,982
- Golden State Promise - No on Prop 40 $10,450,000
- Californians Against Tax Increases, sponsored by the California Business Roundtable - No on 40 $1,114,311
- Stop the Squeeze - No on Prop 40 $400,000
Major donors
| Building a Better California | $158,500,000 |
| Chris Larsen | $5,000,000 |
| Ripple Labs | $5,000,000 |
| California Business Roundtable Issues PAC | $975,000 |
| Right Path California Issues PAC | $584,311 |
| Daniel Tierney | $200,000 |
| Ronald Conway | $100,000 |
| Intersect USA, LLC(Michael Wheeler) | $100,000 |
| California Medical Association | $100,000 |
| California Primary Care Association Advocates | $100,000 |
Donors shown gave 100% of this side’s total.
Linked donors file their own reports, which list where their money comes from.
Reported contributions through Oct. 31, 2026, from itemized contributions filed with the California Secretary of State, CAL-ACCESS. Contributions to the committees that report supporting or opposing the measure, with transfers between allied committees left out. Each donor’s amount adds up their reported contributions to the committees above; names appear as filed. Figures may be updated as new reports are filed. Amounts are rounded to the nearest dollar. Official filings: California Secretary of State, CAL-ACCESS.
Sources
- 2026 General Election Official Voter Information Guide (title and summary, official arguments and rebuttals) — California Secretary of State (Official state voter guide, 2026)
- Proposition 40 ballot analysis — California Legislative Analyst’s Office (Official fiscal analysis, 2026)
- California Proposition 40 (2026) — Ballotpedia (Reference (quotes supporters and opponents), accessed 2026-10-28)
Editorial summary of arguments made by others, not the opinion of We Elect. Last reviewed 2026-10-28. How we write both sides.
We Elect is a Brunner Creative site. Editorial summary of arguments made by others, not the opinion of We Elect. Each side is written to be the strongest case its supporters would recognize, and every claim is tied to a source we opened and read.