On 3 November 2026, California votes on Proposition 40, a one-time tax on the state’s billionaires. Anyone who lived in California on 1 January 2026 and is worth more than $1 billion would owe 5% of their total net worth, not only of the part above $1 billion (the rate phases in between $1 billion and $1.1 billion). Senator Bernie Sanders, campaigning for it, said “the whole country is watching.”
How it would work
The healthcare workers’ union SEIU-UHW put the measure on the ballot. Net worth would be measured at the end of 2026 and the tax would be due in April 2027, payable over five years at a 7.5% yearly charge on the unpaid part. Pensions, retirement accounts and directly held real estate are largely excluded. Private businesses are valued by a fixed formula. Ninety percent of the money would go to public healthcare.
Moving away after 1 January 2026 does not avoid the tax.
How much would it raise?
The state’s nonpartisan Legislative Analyst’s Office (LAO) says the state would “probably” collect “tens of billions of dollars” over several years, and income tax revenue could fall by less than $1 billion a year if billionaires leave. Economists backing the measure, including Emmanuel Saez of UC Berkeley, estimate about $100 billion over 2027 to 2031. Between about 200 and 250 people would pay.
The poll and the politics
The latest Berkeley IGS Poll, of 4,512 likely voters from 15 to 20 September and partly funded by the Los Angeles Times, found 45% in favor and 42% against. A PPIC survey from 4 to 10 September showed 52% in favor.
Two rival measures matter as much. Prop 41 would subject new taxes to the state’s spending limit and to review by the state auditor. Prop 42 would ban certain retroactive state taxes and new taxes on personal property such as investments, businesses and retirement accounts. If either passes with more votes than Prop 40, the Legislative Analyst’s Office says the billionaire tax could be blocked from taking effect, depending on how courts read the conflict.
On 9 October, Governor Gavin Newsom, who opposes Prop 40, endorsed Prop 42; he has taken no position on Prop 41, his spokesperson said.
Who is paying for the fight
The main opposition group, Building a Better California, had raised more than $187 million by late September, according to CalMatters: $56 million against Prop 40 and $131 million for Props 41 and 42. Its largest single donor, Google co-founder Sergey Brin, has given about $102 million, Fortune reported. Supporters had raised about $31 million, mostly union money.
What to watch
- Whether Prop 41 or 42 wins more “yes” votes than Prop 40 on 3 November.
- Whether courts are asked to settle the conflict between the three measures.
- Whether billionaires’ departures cut future income tax, as the LAO warns.
A fair caveat
Revenue estimates depend on stock prices and on how billionaires respond, so the range is wide. Polls a month before a vote can move, and three linked measures are hard to poll.
Questions to bring to your advisors
If a similar tax came where we live, which assets would count, and how would our private holdings and our residency be judged? These are questions to bring to your lawyers and tax advisors, not advice.