California Votes on One-Time 5% Tax Targeting Billionaires

Overview

• Voters in California are deciding on Proposition 40, a ballot measure that would impose a one-time 5% tax on people whose net worth exceeded $1 billion and who were residents on January 1, 2026.
• The initiative was placed on the ballot by the SEIU-United Healthcare Workers West and is presented by supporters as a way to fund state health programs with other uses for education and nutrition mentioned by backers.
• Backers estimate the tax could raise as much as $100 billion, and it would allow billionaires to pay in a single lump sum before April 2027 or spread payments over five years with added charges.
• The campaign has prompted at least seven wealthy residents to change their state residence before the January 1, 2026 cutoff and triggered deals and public statements from some tech leaders about how they would pay if the measure passes.
• The plan draws on proposals by economists Gabriel Zucman and Emmanuel Saez and has produced sharp debate among economists who argue the levy tests a new tool for taxing extreme wealth but does not replace long-term fiscal reforms.