California Voters Decide on Billionaire Wealth Tax Propositions

California voters will decide in November whether to implement Proposition 40, a one-time 5% wealth tax on residents with a net worth exceeding $1 billion. Sponsored by the Service Employees International Union and United Healthcare West, the measure targets assets such as luxury yachts, jewelry, and artwork to raise an estimated $100 billion over five years. The funds are primarily earmarked for healthcare to offset federal cuts to Medi-Cal.

Ro Khanna and Senator Bernie Sanders have championed the measure, with Khanna stating the goal is to "Tax billionaires so they can’t buy democracy." Parallel to the state effort, the two lawmakers introduced the federal Make Billionaires Pay Their Fair Share Act, which proposes a 5% annual tax on all U.S. billionaires.

Opposition to the tax is led by Governor Gavin Newsom and several billionaires, including Elon Musk, Peter Thiel, and Sergey Brin. Brin has spent $102 million to block the measure, while Musk warned that such taxes would eventually apply to everyone. Opponents argue the tax is too narrow and will drive wealthy residents and their revenue out of the state.

To nullify the tax, opponents placed Propositions 41 and 42 on the ballot. Proposition 42, endorsed by Newsom, would permanently ban California from taxing billionaire wealth. If either countermeasure receives more votes than Proposition 40, the wealth tax will be cancelled. Recent polling from the Public Policy Institute of California indicates a majority of voters currently oppose the measure.