Key facts
- California's Proposition 40 proposes a one-time 5% tax on billionaire wealth.
- The tax aims to raise $110 billion to fund public goods and replace Medicaid funding.
- Opponents fear capital flight and legal challenges, while proponents see it as a fight against oligarchy.
- Some billionaires have already moved assets and residences out of California to avoid the tax.
- The tax targets wealth accumulated by billionaires residing in California as of January 1, 2026.
Californians will vote in November on Proposition 40, a proposed one-time 5% tax on the wealth of billionaires residing in the state, aiming to fund public goods and combat oligarchy. Proponents, including six Nobel laureates, hail it as a potential turning point in the battle between democracy and oligarchy, capable of raising $110 billion. However, Governor Gavin Newsom and Xavier Becerra oppose the measure, fearing it will drive billionaires to lower-tax jurisdictions. Some billionaires have already moved assets and residences out of state, and opposition groups are spending heavily to defeat the proposition, which faces legal challenges over its constitutionality and potential impact on future income tax revenues.