Description
The measure would impose a one-time 5% tax on individuals with assets valued over $1 billion who were California residents as of Jan. 1, 2026. Most of the money raised by the tax — 90% — would be spent on healthcare services. The other 10% is earmarked for food assistance and education-related programs. Proposition 40 could raise tens of billions of dollars but could be nullified if Proposition 41 or 42 receive more votes.
A yes argument would mean: Millions of Californians will lose their healthcare because of deep federal spending cuts made by Republicans in Washington. Meanwhile, billionaires’ wealth has grown exponentially compared to that of average Californians — and they pay a far lower overall tax rate because most of their wealth is tied up in stocks and other assets. This one-time tax will allow California to backfill cuts that would otherwise devastate individual Californians as well as emergency rooms, hospitals and clinics.
A no argument would mean: This proposed tax is poorly designed and will result in California losing revenue over time because it is already prompting billionaires to move out of state. Fewer high-income taxpayers could hurt other state programs like schools. Proposition 40 is a one-time source of revenue, even though the federal healthcare cuts are permanent. It sets a dangerous precedent by taxing not only income but financial assets like stocks and retirement accounts.
In support of Prop 40:
Ro Khanna, U.S. representative
Bernie Sanders, U.S. senator
California Democratic Party
California Nurses Association
SEIU-UHW West
In opposition to Prop 40:
Xavier Becerra, candidate for California governor
Sergey Brin, co-founder, Google
Steve Hilton, candidate for California governor
Gavin Newsom, California governor
California Teachers Association
For more information on propositions, candidates, and general election races, check out our voter guide at kqed.org/voterguide
✍️: Marisa Lagos
📹: Anna Vignet
🎬: Darren Tu