California’s Proposition 40 would impose a one-time, 5% “wealth tax” on residents with assets over $1 billion, the official state voter guide says and ballot coverage confirms ahead of the Nov. 3 vote.
The voter guide from the California Secretary of State states the measure “imposes 5% tax on certain taxpayers with assets over $1 billion; revenue primarily for health care,” and describes the plan as a one-time levy paid by taxpayers and some trusts.
Ballot coverage from news outlets says the proposal, commonly called the Billionaire Tax Act or Prop 40, targets roughly 200 to 250 Californians with net worth above $1 billion, and would direct most revenue to health care, food assistance and education.
How the tax would work and the revenue debate
Proposition 40 sets a flat 5% levy on net worth above $1 billion with a narrow phase-out, according to the official ballot language; supporters say the design covers both individuals and certain trusts and includes valuation rules for private assets.
Supporters and academic backers, including professors who helped write the proposal, have argued the measure could raise roughly $100 billion to shore up healthcare programs, while the Secretary of State and nonpartisan analyses describe the fiscal impact as “tens of billions” over several years.
Opponents warn the tax could prompt wealthy Californians to leave and reduce future income-tax receipts; news reports cite large anti-Prop 40 spending by wealthy donors and note high-profile figures publicly opposing the measure.
Polling has shown support slipping toward a close margin in recent months, and prediction markets listed in reporting put the odds of passage below majority levels; reporters say the contest has drawn heavy spending from both supporters and opponents.
Legal and valuation questions are also central: analysts and law professors quoted in coverage say valuing private company stakes and other nonpublic assets is complex but that the initiative includes formulas and possible deferrals for illiquid holdings.
For voters weighing Prop 40, news outlets note the choice tests whether a state-level, one-time wealth levy is a viable tool to raise large sums for public services or an approach likely to prompt legal challenges and migration of wealthy taxpayers.
Sources
- California Secretary of State — official voter guide text describing Prop 40 as a one-time 5% tax on assets over $1 billion and its fiscal summary.
- Reuters — coverage reporting the proposal would hit an estimated 200–250 billionaires and outlining political debate and polling context.
- CNBC — explainer on Proposition 40 citing revenue estimates, polling, legal questions and major donors opposing the measure.
