# Proposition 40: Imposes One-Time Tax on Certain Taxpayers

*measure · California statewide proposition* — November 3, 2026 General Election (2026-11-03), Los Angeles County, California

Research pack generated 2026-10-30T23:52:30+00:00 by ballotscope. Summaries are LLM-generated from the linked originals and may contain errors; check the originals before relying on anything. Sources span 2025-11-24 to 2026-10-13.

## Overview (as of 2026-10-29, from 18 sources)

A one-time 5% tax on the worldwide net worth of people who were California residents on January 1, 2026 and are worth $1 billion or more, measured December 31, 2026, payable at once or over five years with a 7.5% annual deferral charge  [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48); Proposition 40 ballot analysis]. Directly held real estate, pensions and IRAs, Roth accounts up to $10 million, and up to $5 million of other personal assets are excluded  [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48); Prop 40: Billionaire Tax Act]. Revenue goes to a special fund, 90% for health care and 10% for education and food assistance, outside the Proposition 98 school guarantee and the state spending limit  [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48); Proposition 40: Official title and summary and LAO analysis (voter guide PDF); Billionaire Tax Explained: What Proposition 40 Would Mean for California]. The Legislative Analyst estimates a temporary gain of tens of billions of dollars, a possible ongoing income tax loss under $1 billion a year, and calls the amount very hard to predict  [Proposition 40 ballot analysis; Proposition 40: Official title and summary and LAO analysis (voter guide PDF)]. Supporters, led by SEIU-UHW, say it would raise about $100 billion to offset federal health cuts and make billionaires pay a fairer share  [Proposition 40 arguments and rebuttals; Top Democrats join the wealthiest in fighting a California tax increase on billionaires]; opponents, including Gov. Gavin Newsom, the California Teachers Association, and the California Medical Association, say it would drive wealthy taxpayers away, lose revenue over time, and lacks accountability  [Proposition 40 arguments and rebuttals; California Democratic Party endorses billionaire tax, splitting with Newsom; Top Democrats join the wealthiest in fighting a California tax increase on billionaires]. The text lets courts move the tax's dates if the January 1 look-back is struck down, and the Legislature amend it by two-thirds vote  [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]. If Proposition 41 or 42 gets more yes votes, Proposition 40 could be blocked even if it passes  [Proposition 40: Official title and summary and LAO analysis (voter guide PDF); Billionaire Tax Explained: What Proposition 40 Would Mean for California]. Through October 22, 2026, opposing committees reported $130.3 million and supporting committees $33.4 million  [Proposition 40 contribution totals].

### Record highlights
- The Legislative Analyst's final analysis estimates a temporary revenue increase of tens of billions of dollars over several years and a possible ongoing income tax decrease of less than $1 billion a year, and warns that Propositions 41 or 42 could stop Proposition 40 if they get more yes votes. [Proposition 40 ballot analysis; Proposition 40: Official title and summary and LAO analysis (voter guide PDF)]
- August 2026: the California Democratic Party executive board endorsed the measure with 61.7% (60% needed) after a first vote at 59.2%, and voted to oppose Propositions 41 and 42. [California Democratic Party endorses billionaire tax, splitting with Newsom]
- The League of Women Voters of California took a neutral position on Proposition 40. [Ballot Recommendations]
- Through October 22, 2026, opposition committees reported $130,344,804 and support committees $33,413,577; the largest committees were the No on Prop 40 committee ($118.7 million) and the SEIU-UHW-sponsored Yes on 40 committee ($32.9 million). [Proposition 40 contribution totals]
- Polling: a May 2026 PPIC poll found 54% of likely voters in favor; a September 2026 PPIC poll found 52% yes and 46% no. [California Democratic Party endorses billionaire tax, splitting with Newsom; Top Democrats join the wealthiest in fighting a California tax increase on billionaires]
- October 2026: AP reported opponents spending or booking about $96 million in advertising, compared with $209,000 by supporters. [Top Democrats join the wealthiest in fighting a California tax increase on billionaires]

### Stated positions
- The measure's stated purpose is to protect health care and support K-14 education and food assistance by raising revenue from a one-time tax on billionaire wealth, in response to federal and state funding cuts. [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- The drafters say the Legislature's two-thirds amendment power cannot be used to make the tax continuing or to extend it to non-billionaires, and that ordinary filers who declare they are not billionaires face no further reporting. [Prop 40 explainer (section-by-section)]
- SEIU-UHW says the tax is needed to replace an estimated $100 billion in federal health funding lost over five years. [Top Democrats join the wealthiest in fighting a California tax increase on billionaires; Proposition 40: Billionaire tax]
- Gov. Gavin Newsom opposes the state measure and has argued for a national billionaire tax instead. [Top Democrats join the wealthiest in fighting a California tax increase on billionaires; California Democratic Party endorses billionaire tax, splitting with Newsom]
- Gubernatorial candidate Xavier Becerra said no billionaire should pay lower tax rates than teachers or nurses but called the measure 'sketchy policy'. [California Democratic Party endorses billionaire tax, splitting with Newsom]
- Planned Parenthood Affiliates of California CEO Jodi Hicks said her group is not opposed to a wealth tax in concept but considers this proposal seriously flawed. [Top Democrats join the wealthiest in fighting a California tax increase on billionaires; Proposition 40 arguments and rebuttals]

### Where sources disagree
- Revenue: supporters, SEIU-UHW, and Boll, Saez, and Zucman estimate about $100 billion; Hoover estimates about $40 billion at best and a long-run net loss of at least $25 billion; the LAO gives only 'tens of billions' and calls the figure very hard to predict. [California Billionaires: Wealth, Taxes, and Wealth Tax Revenue Estimates; Proposition 40 arguments and rebuttals; Proposition 40: Billionaire tax; Prop 40: Billionaire Tax Act; Proposition 40 ballot analysis; Proposition 40: Official title and summary and LAO analysis (voter guide PDF)]
- Departures: Hoover says at least six billionaires, including Sergey Brin and Larry Page, left before January 1, 2026, removing roughly $536 billion (close to 30% of the base); Boll, Saez, and Zucman say successfully changing residency in that window was very difficult and tax attorneys doubt anyone did. [Prop 40: Billionaire Tax Act; Ballot Recommendations; California Billionaires: Wealth, Taxes, and Wealth Tax Revenue Estimates; Top Democrats join the wealthiest in fighting a California tax increase on billionaires]
- Time between filing and the residency date: Hoover counts 77 days from the measure's filing; Boll, Saez, and Zucman say the final text was published about a month before January 1, 2026 (November 26, 2025). [Prop 40: Billionaire Tax Act; California Billionaires: Wealth, Taxes, and Wealth Tax Revenue Estimates]
- Opposition money: the Secretary of State reports $130.3 million to committees formed for this measure through October 22, 2026; AP reports opponents have raised more than $300 million, counting broader committees such as Building a Better California. Figures for Sergey Brin's giving range from over $57 million (ballot argument) to over $102 million (CounterPunch, citing the Los Angeles Times). [Proposition 40 contribution totals; Top Democrats join the wealthiest in fighting a California tax increase on billionaires; Proposition 40 arguments and rebuttals; Meet the 22 California billionaires opposing Prop 40]
- Number of California billionaires: about 200 (ballot argument, CalMatters), 231 (CounterPunch), around 250 (Boll, Saez, Zucman; Budget Center), or 'a few hundred' (LAO). [Proposition 40 arguments and rebuttals; Proposition 40: Billionaire tax; Meet the 22 California billionaires opposing Prop 40; California Billionaires: Wealth, Taxes, and Wealth Tax Revenue Estimates; Billionaire Tax Explained: What Proposition 40 Would Mean for California; Proposition 40 ballot analysis]
- Expansion: opponents say the Legislature could extend the tax to all Californians' savings and home equity; supporters and the drafters say it cannot apply to anyone but billionaires; Hoover says the threshold, rate, and one-time nature could be changed by a two-thirds vote. [Proposition 40 arguments and rebuttals; Prop 40 explainer (section-by-section); Prop 40: Billionaire Tax Act]
- Retirement accounts: opponents say it would be the first California tax on retirement accounts; the text and the drafters exempt qualified pensions and IRAs and tax only Roth-type balances above $10 million and certain deferred compensation. [Proposition 40 arguments and rebuttals; Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48); Prop 40 explainer (section-by-section)]
- The LAO's earlier PDF analysis omits the section on interactions with Propositions 41 and 42 that appears in the LAO web version and the official voter guide. [Proposition 40 analysis (PDF); Proposition 40 ballot analysis; Proposition 40: Official title and summary and LAO analysis (voter guide PDF)]

### Gaps
- No source independently checks the $25 billion Stanford study cited by opponents; the study itself was not collected.
- No official estimate from the Franchise Tax Board or Department of Finance on administration or collections beyond the LAO analysis.
- No campaign materials from either side beyond the official ballot arguments; the yes and no campaign websites were not collected.
- No detailed coverage of Propositions 41 and 42 themselves; their conflict clauses are known only through secondary descriptions.
- No legal analysis from a neutral source on the constitutionality of the retroactive residency date or worldwide apportionment.
- A GV Wire article on Newsom's support for Proposition 42 could not be retrieved (blocked).

### Arguments for / praise
- Federal cuts to Medi-Cal and food aid threaten coverage and hospitals; the tax would raise about $100 billion to keep hospitals and clinics open and coverage affordable. — *SEIU-UHW, Yes on 40 ballot argument signers, Sen. Bernie Sanders* [Proposition 40 arguments and rebuttals; Top Democrats join the wealthiest in fighting a California tax increase on billionaires; Proposition 40: Billionaire tax]
- Billionaires pay very little tax relative to their wealth (about 0.2% a year in state income tax, by one estimate) because most of their gains are unrealized; a one-time 5% tax is small relative to recent wealth growth. — *Boll, Saez, and Zucman, Chuck Collins (Institute for Policy Studies), Yes on 40 ballot argument* [California Billionaires: Wealth, Taxes, and Wealth Tax Revenue Estimates; Meet the 22 California billionaires opposing Prop 40; Proposition 40 arguments and rebuttals]
- The January 1, 2026 residency date leaves little room to escape the tax by moving, and income tax losses from departures would be small relative to the wealth tax collected. — *Boll, Saez, and Zucman, The measure's drafters* [California Billionaires: Wealth, Taxes, and Wealth Tax Revenue Estimates; Prop 40 explainer (section-by-section); Prop 40: Billionaire Tax Act]
- The tax applies only to billionaires; claims that it could be applied to other Californians are false. — *Yes on 40 rebuttal signers, The measure's drafters* [Proposition 40 arguments and rebuttals; Prop 40 explainer (section-by-section)]
- The state has a responsibility to step in when federal health and food support is cut, and asking those most able to pay is fair (offered as the case for the measure by the League, which stayed neutral). — *League of Women Voters of California* [Ballot Recommendations]

### Arguments against / criticism
- The tax would push billionaires and companies out of California, costing future income tax revenue; Hoover estimates a net long-run loss of at least $25 billion, and opponents cite a $25 billion figure from Stanford economists. — *Hoover Institution, No on 40 ballot argument signers, Ahmad Thomas (Silicon Valley Leadership Group)* [Prop 40: Billionaire Tax Act; Proposition 40 arguments and rebuttals; Billionaire tax risks (Proposition 40)]
- A one-time tax provides temporary money for ongoing needs; most federal Medi-Cal cuts come after 2030, and the measure does not require the money to offset them. — *Hoover Institution, League of Women Voters of California, California Budget & Policy Center* [Prop 40: Billionaire Tax Act; Ballot Recommendations; Billionaire Tax Explained: What Proposition 40 Would Mean for California]
- The Legislature can amend the act by two-thirds vote, which opponents say opens the door to changing the threshold, rate, or one-time nature and to taxing other Californians' assets. — *No on 40 ballot argument signers, Hoover Institution* [Proposition 40 arguments and rebuttals; Prop 40: Billionaire Tax Act]
- The measure exempts its revenue from the school-funding guarantee and the spending limit, which opponents say shortchanges schools by over $3 billion a year, and includes no accountability or safeguards against money going to insurers. — *No on 40 ballot argument signers, Rebuttal signers (CTA, CalTax, State Building Trades)* [Proposition 40 arguments and rebuttals]
- Taxing unrealized business value can leave founders of research-heavy companies with large bills and no cash, and the private-business valuation formula may overstate value and invite litigation. — *Ahmad Thomas (Silicon Valley Leadership Group), Hoover Institution* [Billionaire tax risks (Proposition 40); Prop 40: Billionaire Tax Act]
- The worldwide-assets reach and retroactive residency date face constitutional challenges that could delay or reduce collections. — *Hoover Institution, California Budget & Policy Center* [Prop 40: Billionaire Tax Act; Billionaire Tax Explained: What Proposition 40 Would Mean for California]

## Text analysis (as of 2026-10-29)

Coverage: Official text of Proposition 40 as printed in the Secretary of State's Official Voter Information Guide, Text of Proposed Laws pp. 134-146 (S2): Sections 1-9, including new Cal. Const. art. XIII, §37, Gov. Code §16355, amended Rev. & Tax. Code §17220, and Rev. & Tax. Code §§50300-50314. Read in full. Extracted text loses the italics that mark new provisions; page headers and footers are interleaved.

Drafting quality: **mixed**. Unusually precise for a California initiative: key terms are defined, each asset type gets a valuation rule, anti-avoidance provisions are extensive (trust look-backs, transfer and pledge cut-off dates, debt limits, a general anti-avoidance rule), and administration, penalties, and funding mechanics are spelled out. But several consequential questions are left open: the reach of the Legislature's amendment power, whether the competing-measure clause catches a measure that restricts rather than levies wealth taxes, how far the Article XIII A override extends, and how the deferral-account test applies. It relies on courts reforming its own key dates if they fail, and gives the Franchise Tax Board broad discretion with a temporary exemption from rulemaking procedure.

- **duration** (high, Rev. & Tax. Code §50308(n)-(o); §50301(a)): Who owes is fixed by residency on January 1, 2026, ten months before the vote; how much is measured on worldwide net worth as of December 31, 2026 (§50308(o)). A resident on January 1 who leaves mid-year still owes on year-end wealth. The look-back is the measure's most consequential legal question, and §50311(b) anticipates a challenge to it. — "“Tax obligation date” means January 1, 2026." [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- **special clause** (high, Rev. & Tax. Code §50311(b)): Beyond ordinary severability, courts are told to rewrite the obligation and valuation dates if they are held invalid, substituting the earliest lawful date or year. A court could thus apply the tax to a different set of residents and a different year than voters approved. Standard severability clauses only strike invalid parts. — "preserve the imposition of the tax for the 2026 tax year, or if that is not permissible then for 2027 or the earliest permissible subsequent year" [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- **special clause** (high, Cal. Const. art. XIII, §37(e)-(f)): Revenue is placed outside the Proposition 98 school guarantee (art. XVI, §§8, 8.5), the Gann spending limit (art. XIII B), and the Proposition 2 capital-gains reserve rule (art. XVI, §20). Such exclusions have precedent, but they mean schools and reserves get no formula share of the money. — "shall not be considered “General Fund revenues,” “state revenues,” “moneys,” or “proceeds of taxes” under Section 8 of Article XIII B" [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- **ambiguity** (medium, Cal. Const. art. XIII, §37(e)): This displaces all of Article XIII A (Proposition 13) as applied to this tax, not only its property-tax limits. Article XIII A also holds the two-thirds legislative vote rule for tax increases; read literally, the clause could be argued to reach that rule, though §50310 separately requires two-thirds to amend the Act. The text does not say which provisions it means. — "To the extent any provision of Article XIII A would otherwise be construed to limit, restrict, or apply to the rate, base, valuation, or imposition of the tax authorized by this section, that provision shall not apply to, and is superseded by, this section." [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- **ambiguity** (medium, Rev. & Tax. Code §50310): Supermajority amendment consistent with purposes is standard. The open question is scope: the stated purpose (Sec. 3(a)) is revenue 'from a one-time tax on billionaire wealth', which arguably bars extending the tax to others or later years, but the text does not say so expressly. The clause also covers the whole Act, which includes a constitutional section a statute cannot amend. — "The Legislature may amend the 2026 Billionaire Tax Act, by statute passed in each house of the Legislature by rollcall vote entered in the journal, two-thirds of the membership concurring, if the statute is consistent with and furthers the purposes of the 2026 Billionaire Tax Act." [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- **conflict** (high, Sec. 8): A standard competing-measure clause that works only if this measure gets more yes votes. It deems conflicting any measure that 'levies a tax or affects the tax rates on net worth' of billionaires or uses such revenue; a measure that bans or restricts wealth taxes without levying one may not fit that wording. If a rival measure wins more votes, the outcome turns on that measure's own conflict clause. — "In the event that this measure receives a greater number of affirmative votes than a measure deemed to be in conflict with it, the provisions of this measure shall prevail in their entirety, and any conflicting provisions of the other measure or measures shall be null and void." [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- **special clause** (medium, Rev. & Tax. Code §50314(c)-(d); Cal. Const. art. XIII, §37(h)): Facial challenges get one 60-day window, sole venue in Sacramento County Superior Court, direct appeal to the California Supreme Court, and target decision dates of April 1 and November 1, 2027, without first paying the tax. Using the validation-action procedure for a state tax is unusual. Whether the deadline can bind federal-law challenges is not addressed. — "A validation action shall not be filed more than 60 days after the approval of the act by the voters. If no action is filed within that period, the tax and all proceedings in relation thereto, including the adoption and approval of the act, shall be held to be facially valid and in every respect legal and incontestable." [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- **expansive language** (medium, Rev. & Tax. Code §50312(k)(1), (m)(2)): The anti-avoidance trigger is 'a substantial purpose', not the principal purpose, giving the Franchise Tax Board wide room to recharacterize transactions. 'Transaction' is undefined, so it is unclear whether a change of residence counts. With §50312(m)(2) (no exemptions not expressly authorized) and §50313 (liberal construction), the text leans firmly toward the taxing authority. — "a substantial purpose for any transaction or series of transactions was to obtain a tax benefit with respect to this part that is not intended by the voters or the Legislature, the board may determine the tax consequences to any person in a manner that is reasonable in light of all the facts and circumstances in order to deny that benefit" [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- **expansive language** (medium, Rev. & Tax. Code §50309(b)(2)): All Board regulations and guidance under the Act skip notice-and-comment rulemaking through 2027, covering the filing and first audit period, while the Board must write rules on receivables, abusive transactions, and appraisals. Temporary exemptions occur in other tax measures; this one is broad. — "Until January 1, 2028, the rulemaking provisions of the Administrative Procedure Act" [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- **enforcement** (medium, Rev. & Tax. Code §50309(b)(3)): The deficiency-assessment window for 2026 returns is ten years, far longer than the usual income tax period. — "shall be mailed to the taxpayer within 10 years after the return was filed" [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- **enforcement** (medium, Rev. & Tax. Code §50312(n)): The taxing agency, not only the taxpayer, may take a loss at the Office of Tax Appeals to court for a new trial. The text says this is 'without implication' for other taxes; it is still unusual. — "if the board disagrees with a decision of the Office of Tax Appeals, the board may bring an action in superior court for a trial de novo" [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- **ambiguity** (medium, Rev. & Tax. Code §50301(d)-(e)): Every resident who files a 2026 return must either declare net assets of $1 billion or less or submit a tax declaration (§50301(d)). It is unclear whether the simple declaration is a 'return submitted in accordance with this part' that the Board must examine; (e)(2) gives the Board discretion over the length and nature of examinations. — "The board shall examine all returns submitted in accordance with this part and shall determine the correct amount of the tax under this part." [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- **other** (medium, Rev. & Tax. Code §50302(f); §50303(c)(11)): Anti-avoidance rules reach back before the measure was filed: charitable pledges made after October 15, 2025 do not reduce net worth, and property given away for less than fair market value after that date (over $1 million) stays in the giver's net worth. — "no pledge may reduce net worth if that pledge is entered into after October 15, 2025" [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- **expansive language** (medium, Rev. & Tax. Code §50308(f); §50301(a)): Net worth combines both spouses' worldwide assets regardless of where the spouse lives, and a married couple is treated as one individual for filing. The text does not address a nonresident spouse's separate property except through alternative-apportionment petitions (§50306(b)). — "wherever that spouse is resident" [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- **expansive language** (medium, Rev. & Tax. Code §50308(b)): A trust is separately taxable if a living California billionaire (or a related entity) ever transferred property to it, with no time limit and regardless of the trust's residence. By contrast, §50303(c)(6)(B) adds trust property to the individual's own taxable net worth only for 2026 transfers and 75% of 2025 transfers. Elections avoid double counting, but the reach to old, out-of-state trusts is broad. — "trust is a California resident, if an applicable individual still living with net worth of one billion dollars ($1,000,000,000) or more" [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- **other** (medium, Rev. & Tax. Code §50303(c)(3)(E)-(F), (c)(10)): Private business interests are presumed worth book value plus 7.5 times three-year average book profits, times the ownership share; either side can rebut only with clear and convincing evidence and a certified appraisal. Floors bar values below insured amounts or a funding-round valuation within two years. A formula eases administration but can diverge sharply from market value for fast-growing or asset-heavy firms. — "a present-value multiplier of 7.5 times the annual book profits of the business" [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- **ambiguity** (low, Rev. & Tax. Code §50304(a), (c)): Subdivision (a) makes the test an eligibility condition (tax owed exceeds the taxpayer's publicly traded assets). Subdivision (c) repeats it with 'to the extent that', which could also be read as a cap on how much may be deferred; as a cap it compares a tax amount to an asset value and is hard to apply. — "may only attach assets or groups of assets to an ODA to the extent that the amount of additional tax that would be owed as a result of Section 50301, without the use of an ODA, would exceed the sum of the combined value" [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- **duration** (medium, Rev. & Tax. Code §50304(b), (d)): Deferral-account duties run until the account is closed, bind the estate and assigns, and are enforced as a contract after the taxpayer leaves California. A 'one-time' tax can therefore produce annual reporting and tax events for many years. — "those reporting requirements shall continue even if and after the taxpayer is no longer a resident of California" [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- **expansive language** (medium, Gov. Code §16355(b), (h)): Permitted health uses are illustrative and end with 'other investments to support health care access'. Nothing requires the money to offset federal cuts, and the 10% account sets no split between education and food assistance, leaving the Legislature broad discretion within each account. — "for health care funding, including, but not limited to, expenditures to restore or address any reductions in federal funding or state appropriations" [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- **gap** (medium, Gov. Code §16355(d), (f)(7)): The non-supplantation rule rests on an annual Department of Finance certification, but this subdivision sets no baseline year for 'existing state funds', names no enforcer, and gives no remedy if the certification is wrong. (The 2024-25 baseline in (h) defines reductions, not supplantation.) — "appropriation of funds from this measure shall not be used to supplant existing" [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- **special clause** (low, Sec. 9): Proponent-standing clauses are now routine; this one also charges defense costs to the Attorney General's budget if the Attorney General declines to defend. — "The reasonable fees and costs of defending the act and advocating for its validity, if the Attorney General does not defend the act, shall be a charge on funds appropriated to the Attorney General" [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- **ambiguity** (medium, Rev. & Tax. Code §50306(a)-(b)): By default 100% of a resident's worldwide net worth is apportioned to California regardless of residency history. Relief requires clear and convincing proof that the 'excessive wealth' did not substantially accumulate in California and was not substantially sustained there for 365 days in the prior 48 months; 'excessive wealth' and 'substantially accumulate' are undefined. Relief is floored at 25% unless a tribunal finds the Constitution or federal law requires less. — "Relief under this subdivision shall not reduce the apportionment percentage below 25 percent" [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- **other** (low, Rev. & Tax. Code §50301(a)): The tax is labeled an excise on an activity rather than a property tax, and §37(e) says it is not an ad valorem tax on real property. The label matters for constitutional analysis, but courts are not bound by it. — "An excise tax is imposed for tax year 2026 on the activity of sustaining excessive accumulations of wealth" [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- **carve out** (medium, Rev. & Tax. Code §50303(c)(4), (7), (9)): Directly held real estate is excluded from net worth, while real estate held through a business entity is taxed as part of that entity. Qualified pensions and IRAs are exempt, Roth-type accounts up to $10 million, and up to $5 million of other assets (art, collectibles, vehicles) may be excluded. The same economic wealth can be taxed differently depending on how it is held. — "All interests in any real property held directly by a taxpayer or held via a revocable trust shall not be" [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- Beneficiary: Medi-Cal and other health coverage programs, safety-net providers, and their patients: Ninety percent of net revenue goes to a dedicated health account, appropriable up to $22.5 billion a year. — "Ninety percent shall be allocated to the Billionaire Tax Health Account for" [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- Beneficiary: K-14 education and food assistance programs (CalFresh, CFAP, CalFood, school meals): Ten percent goes to a combined account, up to $2.5 billion a year, with no fixed split between education and food. — "Ten percent shall be allocated to the Billionaire Tax Education and Food Assistance Account" [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- Beneficiary: The Franchise Tax Board: Gets a start-up loan of up to $50 million, annual cost reimbursement from the fund, and authority to hire outside experts and counsel. — "the board may hire and pay reasonable fees to any outside experts or outside counsel" [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- Beneficiary: Billionaires whose wealth is in directly held real estate or retirement accounts: Those assets are excluded, while equivalent wealth in businesses or securities is taxed. — "All interests in any real property held directly by a taxpayer or held via a revocable trust shall not be" [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]
- Beneficiary: The measure's proponent: Has standing to defend the Act in any court, with costs charged to the Attorney General's funds if the Attorney General does not defend. — "the proponent, or in the absence of a proponent, any citizen of this state may defend the legality of this act" [Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)]

Limitations: Reads only the measure's text; does not assess constitutionality, revenue, or economic effects, or how courts and the Franchise Tax Board would read disputed language.

## Timeline (newest first)

- **2027** — Tax due (per LAO). (California Secretary of State)
- **2026-12-31** — Valuation date. (Emmanuel Saez et al. (UC Berkeley; measure drafters))
- **2026-12-31** — Valuation date: net worth measured. (California Office of the Attorney General)
- **2026-12-31** — Valuation date for net worth. (California Budget & Policy Center)
- **2026-10-22** — Contribution totals reported through this date. (California Secretary of State)
- **2026-10-13** — Published: Newsom backs Prop 42: it kills billionaire tax, bans future wealth taxes (GV Wire)
- **2026-10-09** — Published: Top Democrats join the wealthiest in fighting a California tax increase on billionaires (Spectrum News 1 (AP))
- **2026-10-09** — AP report published. (Spectrum News 1 (AP))
- **2026-10-05** — Sen. Bernie Sanders spoke at a Los Angeles rally supporting Proposition 40 (photo caption). (Spectrum News 1 (AP))
- **2026-10-01** — Published: Proposition 40: Billionaire tax (CalMatters)
- **2026-09-28** — Published: Meet the 22 California billionaires opposing Prop 40 (CounterPunch)
- **2026-09-28** — CounterPunch published the commentary. (CounterPunch)
- **2026-09-28** — Published: Proposition 40: Official title and summary and LAO analysis (voter guide PDF) (California Secretary of State)
- **2026-09-28** — Published: Proposition 40 arguments and rebuttals (California Secretary of State)
- **2026-09-20** — Published: Prop 40 explainer (section-by-section) (Emmanuel Saez et al. (UC Berkeley; measure drafters))
- **2026-09** — PPIC poll: 52% of likely voters yes, 46% no. (Spectrum News 1 (AP))
- **2026-08-03** — Published: California Democratic Party endorses billionaire tax, splitting with Newsom (KQED)
- **2026-08** — Published: California Billionaires: Wealth, Taxes, and Wealth Tax Revenue Estimates (Boll, Saez, Zucman (UC Berkeley / NBER working paper))
- **2026-08** — Working paper revised. (Boll, Saez, Zucman (UC Berkeley / NBER working paper))
- **2026-08** — California Democratic Party executive board endorsed Proposition 40 and opposed Propositions 41 and 42. (KQED)
- **2026-08** — Published: Billionaire Tax Explained: What Proposition 40 Would Mean for California (California Budget & Policy Center)
- **2026-07-29** — Published: Billionaire tax risks (Proposition 40) (CalMatters (commentary))
- **2026-07-16** — Published: Proposition 40 analysis (PDF) (Legislative Analyst's Office)
- **2026-05** — Working paper first issued. (Boll, Saez, Zucman (UC Berkeley / NBER working paper))
- **2026-05** — PPIC poll: 54% of likely voters supported the measure. (KQED)
- **2026-02-18** — Campaign kickoff rally with Sen. Bernie Sanders at The Wiltern in Los Angeles (photo caption). (KQED)
- **2026-01-01** — Residency cutoff for the tax, as described by the League. (League of Women Voters of California)
- **2026-01-01** — Residency date for the tax. (Boll, Saez, Zucman (UC Berkeley / NBER working paper))
- **2026-01-01** — Residency date: billionaires resident in California on this date would owe the tax (per LAO). (California Secretary of State)
- **2026-01-01** — Residency date for the tax (per LAO). (Legislative Analyst's Office)
- **2026-01-01** — Tax obligation (residency) date. (Emmanuel Saez et al. (UC Berkeley; measure drafters))
- **2026-01-01** — Tax obligation date: residency determined. (California Office of the Attorney General)
- **2026-01-01** — Residency date under the measure. (Hoover Institution)
- **2025-11-26** — Final initiative text published/formally filed, per the paper. (Boll, Saez, Zucman (UC Berkeley / NBER working paper))
- **2025-11-24** — Published: Initiative 25-0024A1: The 2026 Billionaire Tax Act (amended text) (as filed with the Attorney General; superseded by the printed text) (California Office of the Attorney General)
- **2025-11-24** — Proponent submitted Amendment 1 to Initiative 25-0024 to the Attorney General. (California Office of the Attorney General)
- **2025-11-24** — Initiative text amended (25-0024A1), per Hoover. (Hoover Institution)
- **2025-10-15** — Cutoff date for below-value transfers and charitable pledges under the measure. (Emmanuel Saez et al. (UC Berkeley; measure drafters))
- **2025-10-15** — Cutoff date in the text: charitable pledges and below-value transfers after this date are treated specially in net worth. (California Office of the Attorney General)
- **2025-07-04** — H.R. 1 (One Big Beautiful Bill Act) signed, per the report. (California Budget & Policy Center)
- **2025-07** — Federal HR1 (OBBBA) cuts enacted, per the paper. (Boll, Saez, Zucman (UC Berkeley / NBER working paper))

## Sources

### Newsom backs Prop 42: it kills billionaire tax, bans future wealth taxes
- GV Wire · news · published 2026-10-13 · stance: neutral
- <https://gvwire.com/2026/10/13/newsom-backs-prop-42-it-kills-billionaire-tax-bans-future-wealth-taxes/>

### Top Democrats join the wealthiest in fighting a California tax increase on billionaires
- Spectrum News 1 (AP) · news · published 2026-10-09 · stance: neutral
- <https://spectrumnews1.com/ca/la/politics/2026/10/09/california-billionaire-tax>

An Associated Press report, published by Spectrum News 1, on the coalition opposing Proposition 40, which it says includes Gov. Gavin Newsom, Planned Parenthood, the California Teachers Association, most Republicans, and tech investors who supply most of the money. It reports fundraising and ad spending on both sides, a September PPIC poll, opponents' and supporters' arguments, a Cornell sociologist's view, and allegations against the SEIU-UHW president.
  - AP reports opponents have raised more than $300 million, nearly a third from Sergey Brin, about 10 times the yes side; the yes campaign has raised $32.4 million and Tax the Ultra-Rich Now about $369,000.
  - A September PPIC poll found 52% of likely voters would vote yes and 46% no, per AP.
  - AdImpact data cited by AP show opponents spending or booking about $96 million in ads versus $209,000 by supporters.
  - AP says the measure would be the nation's first tax on billionaires' wealth; 90% of revenue to health care, the rest to education and food assistance.
  - AP reports Brin and Larry Page began cutting ties with California in anticipation of the tax, and that Newsom opposes the state measure while calling for a national billionaire tax.
  - AP reports SEIU-UHW President Dave Regan was accused of harassing female colleagues and threatening union leaders; Regan called the allegations a distraction.

### Proposition 40: Billionaire tax
- CalMatters · voter guide · published 2026-10-01 · stance: neutral
- <https://calmatters.org/california-voter-guide-2026/proposition-40-billionaire-tax/>

CalMatters' 2026 voter guide entry for Proposition 40. It describes the one-time 5% tax on the estimated 200 Californians worth over $1 billion at the start of 2026, reports SEIU-UHW's projection of roughly $100 billion over five years, summarizes each side's case, lists endorsements and media endorsements, reprints the ballot label, and notes the measure would be nullified if Proposition 41 or 42 earns more votes.
  - Proposition 40 would require about 200 Californians worth over $1 billion at the start of 2026 to pay a one-time 5% tax, earmarked mainly for health care with some for food assistance and education.
  - SEIU-UHW, which put the measure on the ballot, projects about $100 billion over five years.
  - Supporters argue the taxpayers benefited most from recent federal tax changes while Congress cut tens of billions from Medicaid; SEIU-UHW argues the cuts will close hospitals and clinics.
  - Opponents, including Silicon Valley entrepreneurs, business interests, and some health and labor groups, say billionaires will leave and long-run revenue will fall; health groups say they were not consulted and that it does not solve long-term health funding.
  - CalMatters says the opposing health groups backed Propositions 41 and 42, competing measures limiting new special taxes, and that if either gets more votes Proposition 40 would be nullified.
  - Media endorsements listed: The Sacramento Bee, The San Diego Union-Tribune, The Orange County Register, and the Los Angeles Times; the linked Union-Tribune, Register, and Times editorials are titled as no recommendations.
  - Reference: CalMatters fact check: could lawmakers expand the tax to everyone? <https://calmatters.org/health/2026/10/prop-40-billionaire-tax-fact-check/>
  - Reference: CalMatters explainer on Prop. 40 <https://calmatters.org/politics/2026/10/california-billionaire-tax-explainer/>
  - Reference: CalMatters on how Props. 41 and 42 could defeat Prop. 40 <https://calmatters.org/health/2026/09/california-wealth-tax-prop-40-41-42/>
  - Reference: California Medical Association statement opposing the measure <https://www.cmadocs.org/newsroom/news/view/ArticleId/51212/CMA-opposes-Billionaire-Tax-Act-citing-concerns-over-long-term-Medi-Cal-funding>
  - Reference: California Democratic Party 2026 general election endorsements <https://cadem.org/wp-content/uploads/2026/08/FINAL-2026-General-Election-Endorsements.pdf>
  - Reference: Los Angeles Times editorial on Prop. 40 <https://www.latimes.com/opinion/story/2026-09-06/editorial-vote-no-on-proposition-40>
  - Reference: Commentary in support (CalMatters) <https://calmatters.org/commentary/2026/07/proposition-40-billionaire-tax-health/>
  - Reference: Commentary in opposition (CalMatters) <https://calmatters.org/commentary/2026/07/billionaire-tax-risks-proposition-40/>

### Meet the 22 California billionaires opposing Prop 40
- CounterPunch · third party analysis · published 2026-09-28 · stance: support
- <https://www.counterpunch.org/2026/09/28/meet-the-22-california-billionaires-opposing-prop-40/>

A CounterPunch commentary by Chuck Collins of the Institute for Policy Studies, summarizing a report by IPS and Tax the Ultra-Rich Now that identifies 22 California billionaires it says are funding or speaking out against Proposition 40. It argues these opponents' wealth has grown far faster than the tax they would pay and that California billionaires pay low state income taxes relative to their wealth.
  - The author says 22 California billionaires opposing the measure have given over $150 million to the opposition.
  - He reports their combined wealth rose from $439.8 billion on January 1, 2025 to $722.1 billion on September 1, 2026, a gain of $282.6 billion, and says the tax would take about one-eighth of that gain.
  - He names Sergey Brin as the largest opposition donor at over $102 million, and lists Peter Thiel ($3 million), Chris Larsen (over $5 million, plus $5 million from Ripple and $12 million to Building a Better California), and John Doerr ($10 million).
  - He reports 231 California billionaires with combined wealth of $2.117 trillion as of September 1, 2026, up from 178 and $1.685 trillion twenty months earlier.
  - Citing Zucman and Saez, he says California billionaires paid on average 0.26% of their wealth per year in state income taxes from 2019 to 2025.
  - Reference: IPS/TURN report: California's Billionaire Wealth Surge <https://voteyeson40and3.org/wp-content/uploads/sites/91/2026/09/California_Billionaire_Report_9-23-2026.pdf>
  - Reference: Los Angeles Times on Sergey Brin's $102 million against the tax <https://www.latimes.com/business/story/2026-08-12/googles-sergey-brin-spent-102-million-fighting-california-wealth-tax>
  - Reference: Boll, Saez, Zucman paper on California billionaires <https://eml.berkeley.edu/~saez/BSZ26CAbillionaires.pdf>
  - Reference: PPIC report on wealth in California <https://www.ppic.org/wp-content/uploads/wealth-in-california.pdf>

### Proposition 40: Official title and summary and LAO analysis (voter guide PDF)
- California Secretary of State · official analysis · published 2026-09-28 · stance: neutral
- <https://vig.cdn.sos.ca.gov/2026/general/pdf/prop40-title-summ-analysis.pdf>

The Proposition 40 pages of the official state voter guide (pages 54-55): the Attorney General's official title and summary and the Legislative Analyst's analysis. The title and summary describes a one-time tax of up to 5% on certain taxpayers with covered assets over $1 billion, a 90/10 split of revenue between health care and food assistance or education, and an exemption of the revenue from constitutional school-funding, reserve, and spending-limit rules. The LAO portion explains the tax, its fiscal effects, and a possible interaction with Propositions 41 and 42. It refers readers to page 134 of the guide for the full text, which is not included here.
  - Attorney General's summary: one-time tax of up to 5% on certain taxpayers with covered assets valued over $1 billion; covered assets include businesses, securities, art, collectibles, and intellectual property, but exclude real property and some pensions and retirement accounts.
  - Revenue allocation per the summary: 90% for health care, 10% for food assistance or education-related programs; the revenue may not replace existing funding for those purposes.
  - The revenue would be exempt from constitutional requirements for school funding, budget reserves, and the state spending limit.
  - LAO: billionaires who were California residents on January 1, 2026 would owe a one-time tax equal to 5% of net worth, due in 2027, with an option to pay over five years at extra cost; real estate, pensions, and retirement accounts generally excluded.
  - LAO fiscal estimate: a temporary revenue increase probably totaling tens of billions of dollars over several years; a possible ongoing income tax revenue decrease of less than $1 billion per year; administrative costs possibly tens of millions of dollars per year for several years, paid from the tax revenue.
  - LAO: if Proposition 41 or 42 receives more yes votes than Proposition 40, Proposition 40 could be stopped from becoming law even with majority approval, because courts could find the measures conflict.

### Proposition 40 arguments and rebuttals
- California Secretary of State · position statement · published 2026-09-28 · stance: mixed
- <https://vig.cdn.sos.ca.gov/2026/general/pdf/prop40-arg-rebuttals.pdf>

The official ballot arguments for and against Proposition 40, with rebuttals, as printed on pages 56-57 of the state voter guide. Supporters (SEIU-UHW, a Planned Parenthood of Pacific Southwest employee, and an AFT Local 1521 member) argue the tax on about 200 billionaires would raise about $100 billion to replace federal health care cuts. Opponents (the California Medical Association, California Primary Care Association, and California School Boards Association, with rebuttal signers from CTA, CalTax, and the State Building Trades) argue it would cost the state $25 billion in lost revenue, lets the Legislature amend it without voter approval, taxes retirement accounts, and lacks accountability. The page states that the arguments have not been checked for accuracy by any official agency.
  - Supporters say the measure would make about 200 California billionaires pay a one-time tax on global wealth and raise about $100 billion for health care, schools, and food assistance.
  - Supporters say billionaires pay lower tax rates than working families and that the tax cannot be applied to anyone but billionaires.
  - Opponents cite a Stanford study they say finds the tax would cost California $25 billion as companies and wealthy residents leave.
  - Opponents say the measure lets the Legislature amend it without voter approval and that independent legal analysis found it opens the door to taxing all Californians' assets.
  - Opponents say it would be the first California tax on retirement accounts, exempts itself from school-funding guarantees (shortchanging schools over $3 billion a year, they say) and the state spending limit, and has no safeguards against money going to health insurers.
  - Opponents say Governor Gavin Newsom and the Democratic and Republican candidates for governor oppose it; supporters list the California Nurses Association, Rep. Ro Khanna, SEIU, LULAC, and CLUE among backers.

### Prop 40 explainer (section-by-section)
- Emmanuel Saez et al. (UC Berkeley; measure drafters) · third party analysis · published 2026-09-20 · stance: support
- <https://eml.berkeley.edu/%7Esaez/prop40explainer-sept2026.pdf>

A section-by-section plain-English summary of Proposition 40 prepared by its drafters and submitted as public testimony. It walks through each section of the measure, explains the drafters' intended meaning of key provisions, and argues that critics' differing readings rest on implausible interpretations. The drafters say they expect courts to rely in part on this summary if they find language ambiguous, and that some technical questions will be left to Franchise Tax Board guidance.
  - Describes the tax as a one-time 5% excise tax for 2026 on the worldwide net worth of billionaires resident in California on January 1, 2026, measured December 31, 2026, payable at once or over five years with a deferral charge, plus optional deferral accounts for illiquid taxpayers.
  - Says the Legislature's two-thirds amendment power (Section 50310) applies to the statutory provisions and, in the drafters' intent, cannot be used to make the tax continuing or extend it to non-billionaires, because the stated purpose is a one-time tax on billionaire wealth.
  - Says filers who check the box affirming they are not billionaires face no further reporting, and that the Board is not required to audit them.
  - Explains private-business valuation: (book value + 7.5 x average book profits) x ownership share, rebuttable by either side with a certified appraisal on clear and convincing evidence; control-rights presumptions do not apply to publicly traded companies.
  - Explains exclusions: directly held real estate (to avoid double taxation with property tax), qualified pensions and Roth accounts up to $10 million, tangible property outside California 270+ days, and $5 million of miscellaneous assets.
  - Says the general anti-avoidance rule lets the Board look through transactions, including residency changes, where a substantial purpose is avoiding the tax, which the drafters describe as broader than existing law.
  - Says Propositions 41 and 42 are the only measures on the ballot that may conflict with Proposition 40 under its Section 8, and that Proposition 3 does not.
  - Reference: Drafters' paper on the policy background (SSRN) <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5996554>
  - Reference: Drafters' discussion of super-voting shares (SSRN) <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6073728>

### California Democratic Party endorses billionaire tax, splitting with Newsom
- KQED · news · published 2026-08-03 · stance: neutral
- <https://www.kqed.org/news/12093726/california-democratic-party-endorses-billionaire-tax-splitting-with-newsom>

A KQED news report by Izzy Bloom and Guy Marzorati on the California Democratic Party executive board's endorsement of Proposition 40, which passed narrowly at 61.7% against a 60% threshold, putting the party at odds with Gov. Gavin Newsom. It reports reactions from both sides, a May PPIC poll, opposition spending, and the party's vote to oppose Propositions 41 and 42.
  - The party's executive board, meeting in San Diego, endorsed Proposition 40 with 61.7% after a first vote fell short at 59.2%; a motion to take no position also failed.
  - SEIU-UHW President Dave Regan called it a sign Democrats are united; San Francisco Democratic Party chair Nancy Tung said the vote barely passed and did not show overwhelming support.
  - Supporters named include Rep. Maxine Waters, Sen. Bernie Sanders, and Rep. Ro Khanna; opponents named include Newsom, gubernatorial candidate Xavier Becerra, and the California Teachers Association.
  - A May PPIC poll cited by KQED found 54% of likely voters and 76% of Democrats would vote yes.
  - KQED reports the opposition, including Sergey Brin, had already spent more than $100 million; the party also voted to oppose Propositions 41 and 42, which KQED says Brin funded and which are seen as poison-pill attempts to undercut Proposition 40.
  - Reference: PPIC May 2026 survey press release <https://www.ppic.org/press-release/becerra-hilton-lead-governors-race-majority-back-billionaire-wealth-tax/>
  - Reference: Politico California Playbook on gubernatorial candidates and the wealth tax <https://www.politico.com/newsletters/california-playbook/2026/01/16/gov-field-isnt-buying-the-wealth-tax-00733083>
  - Reference: KQED profile of SEIU-UHW President Dave Regan <https://www.kqed.org/news/12093303/the-union-man-taking-on-the-democratic-establishment-with-a-billionaire-tax>

### California Billionaires: Wealth, Taxes, and Wealth Tax Revenue Estimates
- Boll, Saez, Zucman (UC Berkeley / NBER working paper) · third party analysis · published 2026-08 · stance: neutral
- <https://eml.berkeley.edu/~saez/BSZ26CAbillionaires.pdf>

An NBER working paper (No. 35218, May 2026, revised August 2026) by Jasper Boll, Emmanuel Saez, and Gabriel Zucman documenting California billionaires' wealth and the taxes they pay, and estimating revenue from Proposition 40. The paper discloses that Saez provided unpaid expert advice on the design and scoring of the initiative. It estimates the one-time 5% tax could raise about $100 billion with comparatively minor effects on income tax revenue, and argues that a permanent annual wealth tax could also raise substantial net revenue.
  - California's roughly 250 billionaires held about $2.3 trillion as of July 1, 2026; their wealth grew 144% from the end of 2022 to the end of 2025.
  - The authors estimate California billionaires pay about 0.2% of their wealth per year in California income tax (about $3.2 billion a year, 2.4% of state income tax revenue), and about 1.1% of wealth in all taxes at all levels.
  - For the top four (Page, Brin, Zuckerberg, Huang), they estimate state income tax of 0.07% of wealth a year on company wealth, and say Page and Brin paid no California income tax on Alphabet wealth in 2019, 2020, and 2023.
  - They estimate the one-time 5% tax could raise about $100 billion and argue that because billionaires pay little income tax, even large departures would cost little income tax relative to the wealth tax.
  - They argue the January 1, 2026 residency date, about a month after the final text was published on November 26, 2025, made it very difficult to change residency in time, citing tax attorneys' skepticism.
  - They criticize the Rauh et al. (2026) scoring for assuming permanent mobility responses to a one-time tax, which they call the main driver of its negative estimate.
  - They report that California startups' share of U.S. equity investment rose to 81.6% in the first half of 2026, which they say shows the initiative has not discouraged investment.
  - Reference: NBER working paper page <http://www.nber.org/papers/w35218>
  - Reference: Authors' data tables (Excel) <https://eml.berkeley.edu/~saez/BSZ_MainTablesFigures.xlsx>
  - Reference: California billionaire wealth tracker <https://cabillionairetracker.org/>
  - Reference: Balkir, Saez, Yagan, Zucman: How much tax do US billionaires pay? (NBER w34170) <https://www.nber.org/papers/w34170>

### Billionaire Tax Explained: What Proposition 40 Would Mean for California
- California Budget & Policy Center · third party analysis · published 2026-08 · stance: neutral
- <https://calbudgetcenter.org/resources/billionaire-tax-explained-what-proposition-40-would-mean-for-california/>

An August 2026 report by the California Budget & Policy Center explaining Proposition 40: who would pay, how net worth is calculated, revenue estimates, how the money could be spent, its likely effects on Californians affected by federal health and food cuts, concerns about the measure, and how Propositions 41 and 42 conflict with it. The Budget Center states that it does not endorse or oppose ballot measures; the report presents both the rationale for taxing wealth and the risks of a one-time, earmarked, state-level tax.
  - Describes a one-time 5% tax on worldwide wealth of individuals, married couples, and trusts over $1 billion, phased in between $1 billion and $1.1 billion; the Center counts around 250 California billionaires with over $2 trillion in wealth.
  - Compares revenue estimates: LAO 'tens of billions'; the measure's authors about $100 billion over five years assuming 10% erosion; Hoover researchers about $40 billion initially. The Center attributes the gap mainly to assumptions about how many billionaires sever California residency.
  - Says the measure gives policymakers broad discretion within the health and education/food categories, and that the education and food account could go entirely to one purpose.
  - Notes the revenue is excluded from Proposition 98, Proposition 2 reserve and debt rules, and the Gann limit, so schools would get less than if the money went to the General Fund.
  - Raises concerns: one-time money for ongoing federal cuts, earmarking that excludes other needs such as housing and child care, and uncertain long-run effects on income tax revenue and the economy.
  - Reviews migration research, finding small effects for state income taxes but larger estimated effects from subnational wealth taxes in Spain and Switzerland, with caveats about applying them to California.
  - Explains that Proposition 41 (Gann limit for new special taxes) and Proposition 42 (ban on new taxes on financial assets and on retroactive taxes) conflict with Proposition 40 and could invalidate it if they receive more votes.
  - Reference: LAO Proposition 40 analysis <https://lao.ca.gov/BallotAnalysis/Proposition?number=40&year=2026>
  - Reference: Authors' revenue estimate (Galle, Gamage, Saez, Shanske, Dec. 2025) <https://eml.berkeley.edu/~saez/galle-gamage-saez-shanskeCAbillionairetaxDec25.pdf>
  - Reference: Boll, Saez, Zucman: California Billionaires (NBER WP 35218) <https://eml.berkeley.edu/~saez/BSZ26CAbillionaires.pdf>
  - Reference: Hoover net present value analysis <https://www.hoover.org/research/net-present-value-billionaire-tax-act-assessment-fiscal-effects-californias-proposed>
  - Reference: Budget Center brief: Proposition 41 <https://calbudgetcenter.org/resources/what-would-proposition-41-mean-for-california/>
  - Reference: Budget Center brief: Proposition 42 <https://calbudgetcenter.org/resources/what-would-proposition-42-mean-for-california/>

### Billionaire tax risks (Proposition 40)
- CalMatters (commentary) · third party analysis · published 2026-07-29 · stance: oppose
- <https://calmatters.org/commentary/2026/07/billionaire-tax-risks-proposition-40/>

A CalMatters guest commentary by Ahmad Thomas, CEO of the Silicon Valley Leadership Group, opposing Proposition 40 and urging support for Propositions 41 and 42. CalMatters frames it as one of two paired pieces, with a nurse arguing the opposing view. Thomas argues the one-time tax trades dependable recurring revenue for a temporary infusion and would tax unrealized business value, encouraging founders and companies to leave.
  - Thomas says the health care and Medi-Cal funding needs are real but that Proposition 40 is the wrong way to address them.
  - He cites the LAO's estimate of tens of billions of dollars in near-term revenue and calls it a 'sugar high', pointing to the LAO's projected ongoing income tax decrease if taxpayers leave.
  - He argues the tax would apply to the estimated value of businesses and ideas before they are sold or profitable, giving founders of research-heavy firms tax bills without cash to pay.
  - He urges a yes vote on Proposition 42, which he says would bar new state taxes based on ownership of financial assets, business interests, and intellectual property and prevent certain retroactive taxes, and on Proposition 41, which he says would add review and auditing of special taxes.
  - Reference: LAO pre-ballot fiscal analysis of the initiative <https://lao.ca.gov/BallotAnalysis/Initiative/2025-024>
  - Reference: Paired commentary in support of Prop. 40 <https://calmatters.org/commentary/2026/07/proposition-40-billionaire-tax-health/>
  - Reference: CalMatters voter guide: Proposition 42 <https://calmatters.org/california-voter-guide-2026/proposition-42-property-taxes/>
  - Reference: CalMatters voter guide: Proposition 41 <https://calmatters.org/california-voter-guide-2026/proposition-41-tax-audits/>

### Proposition 40 analysis (PDF)
- Legislative Analyst's Office · official analysis · published 2026-07-16 · stance: neutral
- <https://lao.ca.gov/ballot/2026/prop40-110326.pdf>

A three-page PDF of the Legislative Analyst's Office analysis of Proposition 40 for the November 3, 2026 ballot. It covers background on California billionaires and health care spending, the proposed one-time 5% wealth tax, the 90% health care allocation, the LAO's fiscal estimates, the yes/no statement, and the ballot label fiscal impact. Unlike the LAO web page and voter guide versions, this PDF contains no section on interactions with Propositions 41 and 42.
  - One-time state tax equal to 5% of net worth for billionaires resident in California on January 1, 2026, due in 2027, payable over five years at extra cost.
  - Real estate, pensions, and retirement accounts generally excluded.
  - 90% of revenue to health care services; the rest to education, food assistance, and tax administration; constitutional spending-limit and school-funding rules would not apply.
  - Fiscal estimate: tens of billions of dollars over several years; possible ongoing income tax loss of less than $1 billion per year; administration costs of tens of millions of dollars per year for several years.
  - This version does not discuss Propositions 41 or 42.

### Initiative 25-0024A1: The 2026 Billionaire Tax Act (amended text) (as filed with the Attorney General; superseded by the printed text)
- California Office of the Attorney General · other · published 2025-11-24 · stance: not_applicable
- <https://oag.ca.gov/system/files/initiatives/pdfs/25-0024A1%20%28Billionaire%20Tax%20%29.pdf>

The full text of Initiative 25-0024 as amended (Amendment 1), the 2026 Billionaire Tax Act, submitted to the Attorney General on November 24, 2025 by proponent Suzanne Jimenez, with a cover letter. It contains findings, purpose, a constitutional amendment (Article XIII, Section 37) authorizing a one-time tax on billionaire wealth and creating a special Reserve Fund, Government Code provisions allocating the money, and a new Part 27 of the Revenue and Taxation Code setting out the tax, net-worth rules, an optional deferral account, appraisals, apportionment, penalties, anti-avoidance rules, expedited judicial review, a conflict clause, and proponent standing.
  - Imposes an excise tax for tax year 2026 of 5% of net worth on California residents (as of January 1, 2026) with net worth of $1 billion or more, and on applicable trusts; net worth is measured December 31, 2026. The rate phases in between $1 billion and $1.1 billion.
  - Taxpayers may pay with their 2026 income taxes or in five annual installments with a 7.5% annual nondeductible deferral charge on the unpaid balance; illiquid taxpayers may use an Optional Deferral Account that taxes later distributions at 5%.
  - Directly held real property, qualified pensions and IRAs, Roth accounts up to $10 million, and up to $5 million of other assets such as art and collectibles are excluded; private business interests are presumed valued at book value plus 7.5 times average book profits.
  - Revenue goes to a special Reserve Fund outside the General Fund: 90% to a health account and 10% to an education and food assistance account, with appropriation caps of $22.5 billion and $2.5 billion a year and a non-supplantation rule.
  - The revenue is exempted from the Article XIIIB spending limit and the Proposition 98 school-funding rules (Sections 8 and 8.5 of Article XVI).
  - The Legislature may amend the Act by two-thirds vote if consistent with its purposes; validation challenges must be filed within 60 days in Sacramento County Superior Court with direct appeal to the Supreme Court.
  - Section 8 says that if this measure gets more votes than a conflicting measure on net-worth taxation of billionaires, this measure prevails entirely.

### Ballot Recommendations
- League of Women Voters of California · endorsement · published undated · stance: neutral
- <https://lwvc.org/ballot-recs>

The League of Women Voters of California's recommendations for the November 3, 2026 propositions. On Proposition 40 the League takes a neutral position, explaining that it has strong positions on both sides: it supports taxing extreme wealth to meet urgent safety-net needs but says the one-time, earmarked structure conflicts with principles of sound public finance and risks long-term revenue loss. The page also explains how Propositions 41 and 42 could prevent Proposition 40 from taking effect; the League's recommendations on 41 and 42 are not legible in the extracted text.
  - LWVC position on Proposition 40: neutral.
  - In favor, the League says the state has a responsibility to step in as federal health and food funding is cut, and that the measure could deliver tens of billions to the safety net.
  - The League says the wealthiest households pay a lower total effective tax rate than the population as a whole, and that inequality on this scale warrants serious consideration of wealth taxes.
  - Against, the League says the measure makes budget decisions at the ballot box by locking proceeds into an earmarked fund, and that a one-time tax is only a stopgap for programs that need yearly funding.
  - The League says six billionaires reportedly left the state before the January 1, 2026 cutoff, potentially erasing more than a quarter of proponents' projected $100 billion, and notes the official estimate is tens of billions and highly uncertain.
  - On Propositions 41 and 42, the League says each is designed to prevail over a conflicting measure, so if either passes with more yes votes, courts could find a conflict and prevent Proposition 40 from becoming law.
  - Reference: LWVC Education Fund unbiased explanation: Prop 40 <https://cavotes.org/ballot-measure/2026-prop-40/>
  - Reference: LWVC Education Fund unbiased explanation: Prop 41 <https://cavotes.org/ballot-measure/2026-prop-41/>
  - Reference: LWVC Education Fund unbiased explanation: Prop 42 <https://cavotes.org/ballot-measure/2026-prop-42/>

### Proposition 40 — Official Voter Information Guide
- California Secretary of State · voter guide · published undated · stance: neutral
- <https://voterguide.sos.ca.gov/propositions/40/index.htm>

The Secretary of State's official voter guide landing page for Proposition 40. It gives the official summary (a 5% tax on certain taxpayers with assets over $1 billion, revenue primarily for health care, exempt from constitutional school-funding and spending-limit requirements), the fiscal impact line, what yes and no votes mean, short pro and con arguments written by the campaigns, lead supporters and opponents, and campaign contacts. The full analysis, arguments, and text of the proposed law are not on this page.
  - Summary: imposes a 5% tax on certain taxpayers with assets over $1 billion; revenue primarily for health care; revenue exempt from constitutional school-funding requirements and the spending limit.
  - Fiscal impact: temporary revenue increase of tens of billions of dollars over several years; possible ongoing income tax decrease of less than $1 billion per year.
  - Placed on the ballot by petition signatures.
  - Supporters listed: U.S. Senator Bernie Sanders; SEIU United Healthcare Workers West. Opponents listed: California Primary Care Association; California School Boards Association; California Taxpayers Association.
  - Reference: Yes on 40 campaign <https://yeson40.com/>
  - Reference: No on 40 campaign <https://votenoon40.org/>

### Proposition 40 contribution totals
- California Secretary of State · campaign finance · published undated · stance: not_applicable
- <https://www.sos.ca.gov/campaign-lobbying/helpful-resources/measure-contributions/2026-ballot-measure-contribution-totals/proposition-40-imposes-one-time-tax-certain-individuals-and-trusts-initiative-constitutional-amendment-and-statute>

The Secretary of State's page of reported contribution totals for committees formed to support or oppose Proposition 40, current through October 22, 2026. Support committees reported $33,413,577 in total; opposition committees reported $130,344,804.
  - Support total: $33,413,577 across two committees, almost all from the SEIU-UHW-sponsored Yes on 40 committee ($32,932,998).
  - Opposition total: $130,344,804 across four committees, led by 'No on Prop 40 - Doctors, Teachers, Small Businesses, Working Families and Public Safety Against the Reckless Wealth Tax Experiment' ($118,739,982).
  - Other opposition committees: Golden State Promise ($10,450,000), Californians Against Tax Increases sponsored by the California Business Roundtable ($754,822), and Stop the Squeeze ($400,000).
  - The page notes that committees raising $1 million or more must report their top 10 contributors.
  - Reference: Cal-Access: Yes on 40 (SEIU-UHW) committee 1484470 <http://cal-access.sos.ca.gov/Campaign/Committees/Detail.aspx?id=1484470&session=2025>
  - Reference: Cal-Access: No on Prop 40 committee 1492108 <http://cal-access.sos.ca.gov/Campaign/Committees/Detail.aspx?id=1492108&session=2025>
  - Reference: Cal-Access: Golden State Promise committee 1486695 <http://cal-access.sos.ca.gov/Campaign/Committees/Detail.aspx?id=1486695&session=2025>
  - Reference: FPPC top 10 contributors lists <http://www.fppc.ca.gov/transparency/top-contributors.html>

### Proposition 40 ballot analysis
- Legislative Analyst's Office · official analysis · published undated · stance: neutral
- <https://lao.ca.gov/BallotAnalysis/Proposition?number=40&year=2026+>

The Legislative Analyst's Office web page with its official ballot analysis of Proposition 40. It explains what billionaire wealth is, describes the proposed one-time 5% tax on net worth of billionaires resident in California on January 1, 2026, says most of the money must go to health care, notes a possible interaction with Propositions 41 and 42, and gives the LAO's fiscal estimates. The text matches the analysis printed in the official voter guide.
  - Billionaires resident in California on January 1, 2026 would pay a one-time tax of 5% of net worth, due in 2027, with an option to spread payments over five years at extra cost.
  - Real estate, pensions, and retirement accounts generally excluded.
  - 90% of the money must be spent on health care services; the rest on education, food assistance, and tax administration. Constitutional spending-limit and school-funding rules would not apply to this money.
  - If Proposition 41 or 42 gets more yes votes, Proposition 40 could be stopped from becoming law even with majority approval.
  - Fiscal estimate: temporary revenue of tens of billions of dollars over several years; possible ongoing income tax loss of less than $1 billion per year; administrative costs of tens of millions of dollars per year for several years.
  - Reference: LAO Proposition 40 analysis (PDF) <https://lao.ca.gov/ballot/2026/prop40-110326.pdf>
  - Reference: LAO analyses of propositions on the November 3, 2026 ballot <https://lao.ca.gov/BallotAnalysis/Propositions?date=11%2F3%2F2026>

### Text of Proposed Law: Proposition 40 (Official Voter Information Guide, Text of Proposed Laws, PDF pages 35–48)
- California Secretary of State · official text · published undated · stance: not_applicable
- <https://vig.cdn.sos.ca.gov/2026/general/pdf/text-proposed-laws.pdf#page=35>

The official text of Proposition 40. It imposes a one-time 2026 excise tax of 5% of worldwide net worth on individuals who were California residents on January 1, 2026 with net worth of $1 billion or more, and on certain trusts. It sets detailed valuation, debt, trust, and apportionment rules, an optional deferral account for illiquid taxpayers, strong anti-avoidance and enforcement powers, and expedited court review. Revenue goes to a special fund outside the General Fund and the Proposition 98 and Gann-limit formulas: 90% for health care, 10% for K-14 education and food assistance.
  - Liability turns on residency on January 1, 2026; net worth (both spouses, worldwide) is measured December 31, 2026. The rate phases in between $1 billion and $1.1 billion.
  - Payment with 2026 income taxes, or in five annual installments with a 7.5% annual nondeductible deferral charge; an Optional Deferral Account lets taxpayers whose tax exceeds their publicly traded assets defer tax on illiquid assets, taxed at 5% of later distributions, with duties continuing after they leave California.
  - Excluded: directly held real estate, qualified pensions and IRAs, Roth accounts up to $10 million, and up to $5 million of other assets. Private businesses are presumed worth book value plus 7.5 times average book profits, rebuttable only by clear and convincing evidence.
  - 100% of net worth is apportioned to California regardless of residency history; relief by petition is floored at 25% unless the Constitution or federal law requires less.
  - Anti-avoidance: trust look-backs, charitable pledges and below-value transfers after October 15, 2025 disregarded, a 'substantial purpose' general anti-avoidance rule, a 10-year assessment window, and Franchise Tax Board power to seek trial de novo after losing at the Office of Tax Appeals. Board rules are exempt from the Administrative Procedure Act until 2028.
  - Health account appropriations capped at $22.5 billion a year, education and food at $2.5 billion; the money may not supplant existing state funding. The tax is made nondeductible for state income tax.
  - Facial challenges must be filed within 60 days in Sacramento County Superior Court, with direct appeal to the California Supreme Court. Courts are told to reform the tax's dates, preserving a 2026 or the earliest later tax year, if the dates are held invalid.
  - The Legislature may amend by two-thirds vote if consistent with the Act's purposes. If this measure outpolls a conflicting measure on billionaire net-worth taxation, it prevails in its entirety.

### Prop 40: Billionaire Tax Act
- Hoover Institution · third party analysis · published undated · stance: oppose
- <https://www.hoover.org/research/prop-40-billionaire-tax-act>

The Hoover Institution's 'California Decides' Proposition Lab guide to Proposition 40. It describes the measure's mechanics, quotes its key language, presents a proponents' case and an opponents' case, and then gives Hoover's own assessment, which concludes that the measure could raise short-run revenue but leave California with a net long-run loss of at least $25 billion once lost income taxes from departing billionaires are counted. It also flags constitutional and administrative challenges.
  - Describes the tax: 5% of total net worth for residents worth $1 billion or more, phased in between $1.0 and $1.1 billion; residency fixed January 1, 2026, net worth measured December 31, 2026; payable in full or in five installments with a 7.5% annual charge.
  - Notes exclusions for directly held real estate, pensions and traditional retirement accounts, Roth accounts up to $10 million, and up to $5 million of art, cars, and personal property; revenue goes to a reserve fund outside the Gann limit, Proposition 98, and rainy-day rules.
  - Says every California income tax filer, more than 19 million, would have to declare whether their net worth exceeds $1 billion.
  - Hoover research estimates about $40 billion collected over five years in the best case, versus proponents' $100 billion, and a net loss of at least $25 billion when lost income tax revenue is counted.
  - Says at least six billionaires, including Sergey Brin and Larry Page, publicly left California before January 1, 2026, removing roughly $536 billion, close to 30% of the tax base.
  - Flags Section 50310, which lets the Legislature amend the act by two-thirds vote, as allowing changes to the threshold, rate, and one-time nature; and flags Commerce Clause and Supremacy Clause risks to the 100% apportionment default.
  - Reference: Full text: Initiative 25-0024A1 (Attorney General PDF) <https://oag.ca.gov/system/files/initiatives/pdfs/25-0024A1%20%28Billionaire%20Tax%20%29.pdf>
  - Reference: LAO pre-ballot fiscal analysis <https://lao.ca.gov/BallotAnalysis/Initiative/2025-024>
  - Reference: LAO Proposition 40 analysis <https://lao.ca.gov/BallotAnalysis/Proposition?number=40&year=2026>
  - Reference: Hoover net present value analysis of the act <https://www.hoover.org/research/net-present-value-billionaire-tax-act-assessment-fiscal-effects-californias-proposed>
  - Reference: Hoover paper on the fiscal rationale <https://www.hoover.org/new-hoover-paper-challenges-fiscal-rationale-california-billionaire-wealth-tax>
  - Reference: Hoover wealth tax primer <https://www.hoover.org/research/wealth-tax-primer>
  - Reference: PDF version of this guide <https://hoover-s3-website.s3.us-west-2.amazonaws.com/s3fs-public/2026-08/California%20Decides_Proposition%2040_final.pdf>

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