Key facts
- Proposition 40, a one-time 5% wealth tax on California residents with over $1 billion in net worth, will appear on the November 3, 2026 ballot.
- The tax aims to fund state-funded healthcare programs, food assistance, and public education.
- The initiative was sponsored by SEIU United Healthcare Workers West and qualified with over 980,000 signatures.
- California Governor Gavin Newsom opposes the measure, citing concerns about financial stability and wealthy taxpayers leaving the state.
- Some billionaires have reportedly left California to avoid the potential tax, though residency audits are expected.
- Analysis suggests the tax could generate tens of billions in revenue but also lead to annual income tax revenue losses.
Backers of a proposed California wealth tax initiative are actively engaging in Washington, D.C., seeking support for the measure that will appear on the November 3, 2026 ballot. The initiative, known as Proposition 40, would impose a one-time 5% tax on the net worth of California residents exceeding $1 billion, with revenues earmarked for healthcare programs, food assistance, and public education. Prominent political figures supporting the effort include Representative Ro Khanna and Senator Bernie Sanders, who view it as a populist economic message and a corrective to current economic policies.
However, the initiative faces significant opposition. California Governor Gavin Newsom has warned that the tax could imperil the state's financial stability and drive wealthy individuals out. This concern is echoed by Silicon Valley titans like Google co-founder Sergey Brin, who has invested heavily in opposing measures. Other notable opponents who have reportedly left California to avoid the tax include PayPal co-founder Peter Thiel, former Uber CEO Travis Kalanick, and Google co-founders Larry Page and Sergey Brin. The state attorney general's office issued the official title and summary for the initiative, which was sponsored by the labor union SEIU United Healthcare Workers West (UHW) after they collected over 980,000 valid signatures.
Analysis from the California Legislative Analyst's Office suggests the wealth tax could temporarily increase state revenue by tens of billions of dollars, though it also anticipates annual losses in income tax revenue due to some billionaires relocating. SEIU-UHW estimates the tax could generate $100 billion, including $27 billion from the six billionaires who have reportedly left the state, though their residency status for tax purposes remains subject to audit. Experts like academic Kent Smetters have questioned the union's revenue projections, citing potential reclassification of wealth and residency changes.