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Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →Clear out junk files and repair common Windows errorsFree Scan →Scan for outdated or missing drivers - takes under a minuteDriver Scan →California’s Proposition 40 would impose a one-time 5% tax on the net worth of billionaires who lived in the state on January 1, 2026. The California Democratic Party supports it, while Gov. Gavin Newsom and other prominent Democrats oppose it. Voters will decide the measure on November 3, 2026, amid sharp disagreement over health-care funding, tax flight and the state’s reliance on wealthy taxpayers.
What Proposition 40 would do
A one-time tax tied to a specific residency date
Proposition 40 is not an annual wealth tax. It would collect 5% of the net worth of billionaires who were California residents on January 1, 2026. The tax would be due in 2027. A taxpayer could spread payments over five years, but the installment option would cost more than paying at once.
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Assets generally excluded from the calculation
The measure generally excludes real estate, pensions and retirement accounts. Its practical effect therefore depends on how the state values the remaining taxable assets and on how taxpayers respond before the liability is collected. The proposal is aimed at accumulated wealth rather than income reported in a single year.
Where the money would go
Ninety percent of the proceeds must support public health-care services. The balance is allocated to K–14 public education, food assistance and administration of the tax. Within those categories, the state would determine when and how to spend the funds. The initiative’s stated rationale is that much billionaire wealth is not taxed as income until assets are sold; that is the campaign’s justification, not a separate finding by the state’s fiscal analyst.
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What the official fiscal analysis says
The California Legislative Analyst’s Office says collections could reach tens of billions of dollars over several years, but it does not provide a dependable final total. Much of the taxable wealth is connected to stock prices, which can move substantially, and taxpayers could change where they live, how they hold assets or when they realize gains.
| Issue | LAO estimate or finding | Important qualification |
|---|---|---|
| One-time revenue | Tens of billions of dollars over several years | Temporary collections; amount and timing are difficult to predict because of market movements and taxpayer behavior. |
| Possible ongoing income-tax losses | Less than $1 billion per year | An estimate of potential reductions if billionaires leave or alter their behavior, not an observed result. |
| Administration | Tens of millions of dollars per year for several years | Projected costs for creating and running the tax system. |
The tax has not been implemented, so none of these figures is a measured outcome. The LAO also does not offer a definitive estimate of how many taxpayers might move out of California.
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Why California Democrats disagree
Supporters’ case
Supporters present Proposition 40 as a way to finance urgent health-care needs while adding money for schools and food assistance. The initiative’s text emphasizes that billionaires can hold substantial wealth without paying income tax on it until an asset is sold. U.S. Sen. Bernie Sanders and the Service Employees International Union–United Healthcare Workers West are backing the measure. At a California rally, Sanders told supporters, “Brothers and sisters, that is the question on the ballot,” according to the Associated Press.
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Opponents’ case
Opponents say a one-time levy could unsettle a state budget that already depends heavily on high earners. They warn that wealthy residents could relocate or change their tax strategies, reducing future income-tax receipts and making revenue less predictable. The LAO acknowledges those behavioral risks, while estimating that the possible ongoing income-tax reduction would probably be below $1 billion annually. That estimate remains uncertain because it describes a possible response, not a result California has experienced.
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The party’s endorsement does not settle the voter question
The California Democratic Party has endorsed Proposition 40, but Newsom and several prominent Democratic allies oppose it. The split is not a simple contest between Democrats and Republicans, nor does a party endorsement show how every Democratic voter or health and education organization will vote.
A Berkeley Institute of Governmental Studies survey released March 19, 2026, found 52% of registered voters supporting the measure, 33% opposing it and 15% undecided after respondents read a summary. Among self-identified Democrats, 72% supported it. That was an early survey with specific wording, not a forecast of November results and not an October measure of public opinion.
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Campaign spending and named positions
The official California Secretary of State voter guide lists Sanders and SEIU-UHW among supporters. It identifies the California Primary Care Association, California School Boards Association and California Taxpayers Association among opponents.
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1Scan for outdated or missing drivers - takes under a minute2Repair Windows errors before they cause bigger problems3Fix the driver behind crashes, sound loss and screen glitchesCampaign spending has been highly uneven so far. The Associated Press reported on October 9, 2026, citing AdImpact, that opponents had spent or booked roughly $96 million in television, other airtime and digital messaging, compared with $209,000 by supporters. Those figures are time-sensitive and can change before Election Day; they do not measure voter sentiment.
How Propositions 41 and 42 could affect Proposition 40
Proposition 40 is not the only measure that matters to the outcome. The official analysis says Proposition 41 or Proposition 42 could prevent Proposition 40 from taking effect if either receives more “yes” votes, even if Proposition 40 itself wins a majority. The measures’ interaction creates a separate ballot-mechanics question from whether voters favor the wealth tax in principle, and the final legal resolution should not be assumed in advance.
What a yes or no vote means
Yes on Proposition 40
The state would impose the one-time 5% billionaire net-worth tax on the specified January 1, 2026, California residents, collect it in 2027 or through the costlier five-year payment schedule, and direct 90% of proceeds to public health care.
No on Proposition 40
The proposed tax would not be enacted through this measure. California would forgo the temporary revenue described by the LAO and retain its existing tax structure, including the fiscal risks and funding pressures that supporters say Proposition 40 is intended to address.
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A free scan shows the junk files, broken settings and background clutter dragging Windows down - then fixes them in one click.Free scan · Windows 10 & 11The central choice is therefore between a large but uncertain one-time source of funding and concerns about volatility, administration and possible effects on future income-tax revenue. Voters must also consider whether Proposition 41 or 42 could supersede Proposition 40 under the ballot rules described in the official analysis.
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