California voters decide on proposed wealth tax for billionaires

California voters headed to the polls on Nov. 3, 2026, to decide the fate of Proposition 40, a ballot measure that would implement a one-time 5% tax on the net worth of individuals with assets exceeding $1 billion. The tax applies to the worldwide wealth of those who were California residents on Jan. 1, 2026, and maintained a net worth of at least $1 billion by the end of the year.

Under the proposal, 90% of the generated revenue is designated for public healthcare services, with the remaining funds allocated to education, food assistance, and administrative costs. Supporters of the measure, including the labor union SEIU United Healthcare Workers West and U.S. Senator Bernie Sanders, argue the tax is a necessary step to address potential federal funding cuts to the state's healthcare system, which they estimate could reach $100 billion over five years.

The measure faces opposition from several organizations, including the California Business Roundtable, the California Medical Association, the California School Boards Association, and the California Taxpayers Association. Democratic Governor Gavin Newsom has also voiced his opposition, citing concerns that the tax could lead to wealth flight and negatively impact the state's long-term tax base.

Taxpayers subject to the levy would have the option to pay the full amount at once or distribute payments over five years. Those choosing the installment plan would be subject to an annual deferral charge of 7.5% on the remaining balance. The proposal excludes certain assets, such as real estate, pensions, and retirement accounts, from the wealth calculation.

If the measure passes, collection is scheduled to begin in 2027. The initiative includes provisions for potential legal challenges and may be nullified if competing ballot measures, specifically Proposition 41 or 42, receive more votes and are determined by the courts to be in conflict.