California voters will decide on November 3, 2026, whether to approve Proposition 40, a ballot initiative that would impose a one-time 5% tax on the state's billionaires. The measure targets an estimated 200 to 250 individuals in California who collectively hold more than $2 trillion in wealth, according to Forbes.
The proposal follows a history of citizen-led initiatives in California. While voters passed the property-tax-limiting Proposition 13 in 1978, historical data shows that only one in three citizen initiatives are approved. A similar measure to increase taxes on top earners, Proposition 30, was defeated by voters in 2022.
Proponents of Proposition 40, including University of California, Berkeley economics professor Emmanuel Saez, state the measure would raise $100 billion for healthcare, education, and food assistance. Skeptics, however, estimate the revenue at approximately $40 billion and suggest the tax could lead to capital flight. Google co-founder Sergey Brin has spent more than $100 million to defeat the measure and support countermeasures. Governor Gavin Newsom also opposes the initiative, instead favoring a nationwide federal wealth tax.
The proposal affects a group of approximately 200 to 250 residents in California whose individual net worth exceeds $1 billion. Based on the reported collective wealth of $2 trillion, a 5% tax would average $400 million per billionaire, though the actual amount would vary based on individual holdings. Supporters say the projected revenue would fund public services, while opponents argue the state could lose future investment if high-net-worth individuals leave the state.
A person living in California would notice the impact through the funding of state programs like healthcare and food assistance if the measure passes. The tax is designed to be retroactive to January 1, limiting billionaires' ability to avoid the tax by moving.
The success of the measure remains uncertain as polling shows shifting support. An August UC Berkeley IGS Poll found 48% support among likely voters, while a September Public Policy Institute of California poll found 52% support. Political analysts note that California ballot measures often lose support as Election Day approaches. Following the November 3 vote, the results will determine if the one-time tax is implemented or if competing countermeasures supported by opponents take effect to void the proposal.