California billionaire tax faces support and opposition ahead of 2026 vote

California’s proposed Proposition 40, a measure that would impose a one-time 5 percent tax on residents with a net worth of at least $1 billion, faces a complex path toward the November 2026 election. Nobel Prize-winning economists have endorsed the initiative, which aims to fund healthcare, education, and food assistance programs. Recent polling from the Public Policy Institute of California indicates 52 percent support for the tax.

However, the proposal faces significant opposition and potential legal hurdles. Critics argue the tax is based on faulty research and could cause substantial economic damage. A Hoover Institution study noted that wealthy individuals have already moved approximately $536 billion, or nearly 30 percent of aggregate billionaire wealth, out of the state in anticipation of the measure.

Additionally, two other measures, Proposition 41 and Proposition 42, currently hold slim leads in the polls. Proposition 41 would require audits for new taxes and restrict revenue allocation, while Proposition 42 would prohibit taxes on financial assets. Under California law, if these measures pass and conflict with Proposition 40, the measure with the highest affirmative vote would prevail.