California Proposition 40 proposes one-time wealth tax on billionaires

California voters will decide on Proposition 40 this November, a ballot measure that proposes a one-time 5% tax on the assets of approximately 200 to 250 billionaires in the state. Supporters, including healthcare unions and SEIU United Healthcare Workers West President Dave Regan, argue the tax is necessary to backfill federal funding cuts and protect healthcare services. If passed, the measure would direct 90% of the revenue to healthcare and 10% to food assistance and public education.

Opponents, including tech entrepreneurs and various political figures, argue the tax could be unconstitutional and create significant economic disincentives. Critics highlight the difficulty of taxing individuals who possess high paper wealth through company valuations but lack liquid cash, noting that paying the tax might force founders to sell large portions of their companies. The debate has drawn national attention, with some viewing it as a potential precursor to similar wealth tax movements in other states.