California Ballot Measure 40 Seeks $100 Billion in One-Time Tax on Billionaires

California voters will decide on November 3, 2026, whether to impose a one-time 5 percent tax on the accumulated wealth of individuals worth more than $1 billion. If approved, Proposition 40 would generate approximately $100 billion, a sum intended to address state budget shortfalls. The measure targets an estimated 250 California residents who held legal residency as of January 1, 2026.

The proposal aims to counteract severe cuts to the state healthcare system resulting from the One Big Beautiful Bill Act. Supporters argue that 90 percent of the raised funds will restore these healthcare services, while the remaining 10 percent will support food assistance and public education. Dave Regan, president of the SEIU United Healthcare Workers Trust, stated that the tax is an emergency measure to prevent millions from losing coverage.

Regan, whose union led the campaign, warned that without intervention, 3.5 million Californians could lose their insurance, 20 million would face higher premiums, and some medical facilities might close. He criticized state leaders for their lack of a plan to address the crisis. "Neither Governor Newsom nor Secretary Becerra have offered one idea to fix an imminent crisis in healthcare in California, and they all agree as to what the consequences are gonna be," Regan said.

Opposition to the measure includes prominent Democrats, such as Governor Gavin Newsom and gubernatorial candidate Xavier Becerra. Newsom has advocated for a federal wealth tax instead, arguing that a state-level tax could erode California’s competitive advantage and drive wealthy residents and businesses to other states. Critics also note that the proposal allocates the vast majority of funds to a single category, leaving no provision for public safety, housing, or wildfire prevention.

Stuart Waldman, an advocate for the Los Angeles business community, argued that the state faces a spending issue rather than a revenue one. He noted that 38 percent of the state budget currently comes from the top 1 percent of taxpayers. "If those people moved, and some of them already have, it would have a drastic impact on our state budget," Waldman said. He added that a tax on this demographic would affect healthcare, teachers, and education.

Voters will cast their ballots on the proposition this week. The outcome will determine whether California becomes the first state in the nation to enact a wealth tax on billionaires. Results are expected to follow the close of polls on Tuesday night.