California Voters Weigh Billionaire Wealth Tax and Countermeasures

California voters are deciding on three competing tax measures that will determine the state's approach to taxing extreme wealth. Proposition 40 proposes a one-time 5% tax on residents with a net worth exceeding $1 billion, with the goal of raising approximately $100 billion for education and healthcare. The measure is backed by the Service Employees International Union-United Healthcare Workers West and the California Democratic Party.

To counter the wealth tax, Propositions 41 and 42 have been placed on the ballot. Proposition 41 would require new taxes to adhere to state spending limits, while Proposition 42 would ban retroactive taxes and taxes on personal property. Under current ballot rules, Proposition 40 only takes effect if it receives more votes than both of these countermeasures.

Opposition to the wealth tax is led by Building a Better California, a group funded by billionaires including Google co-founder Sergey Brin. The organization has spent over $187 million across the three measures. Governor Gavin Newsom also opposes the tax, arguing that the measure would drive businesses and wealthy residents out of the state.