Prop 40: California votes on a 5% billionaire tax, and two rivals that could void it

California votes today on Prop 40, a one-time tax of 5% of the net worth of every billionaire who lived in the state on 1 January 2026. The state’s Legislative Analyst expects it to raise “tens of billions of dollars”, spread over several years and mostly for health care, its ballot analysis says. The last big poll before the vote had it losing, and two other measures on the same ballot could cancel it even if it wins.

Voters care about it. Asked which of the 14 state propositions on the ballot interested them most, 22% of likely voters named Prop 40, second only to a voter ID measure, the Public Policy Institute of California found. It is a tax on wealth itself, not on income or property; our explainer on the wealth tax shows how few rich countries still have one.

What is Prop 40 in California?

Prop 40 is a constitutional amendment and a law in one measure. Under it, Californians with a net worth of $1bn or more on 1 January 2026 would pay a one-time state tax of 5% of that net worth in 2027. They could spread the payments over five years, but would pay more to do so. Real estate, pensions and retirement accounts would generally be left out of the sum.

The Legislative Analyst says California is home to “a few hundred” billionaires, many of whom made their money as executives of or investors in its technology companies. Fixing the date at 1 January 2026, ten months before the vote, means none of them can avoid the tax by leaving now.

The money comes with rules:

• 90% must go to health care for the public. The state and federal governments already spend more than $200bn a year on state health programmes, mostly Medi-Cal, the insurance for people on low incomes.
• The other 10% goes to education, food assistance and running the tax.
• The constitution’s limit on state spending, and its rule that a set share of revenue goes to schools and community colleges, would not apply to this money. That detail is what links Prop 40 to Prop 41.

How much would the billionaire tax raise?

The Legislative Analyst does not give a single figure. It says the state “probably would collect tens of billions of dollars” over several years, and that the timing and the total are “very hard to predict”: much of the wealth is in shares, whose prices move, and billionaires may act to cut what they owe.

There is a cost on the other side. Billionaires pay state income tax every year, and some may leave California because of the tax. The Legislative Analyst puts the likely loss of income tax at “less than $1 billion per year”, ongoing, plus administrative costs of tens of millions of dollars a year for several years, paid from the tax itself.

Prop 41 and Prop 42: how Prop 40 could pass and still fail

Two measures on today’s ballot work against Prop 40.

• Prop 41 would nullify any state tax enacted after 1 January 2026 that keeps its revenue outside the voter-approved spending limit, and would require audits of programmes paid for by new special taxes, the Legislative Analyst explains.
• Prop 42 would ban any new state tax on owning financial assets or other personal property, everything people own other than real estate, and limit retroactive taxes, according to its analysis. It would also nullify taxes enacted after 1 January 2026 that conflict with it.

If more than one passes, the state constitution decides. “If provisions of two or more measures approved at the same election conflict, the provisions of the measure receiving the highest number of affirmative votes shall prevail,” Article II, Section 10 says. So Prop 40 could win a majority and still lose to Prop 42 if Prop 42 wins more yes votes. Whether the measures conflict, and how far, could end up in court.

Prop 40 polls: support has slipped

The same survey asked 1,086 likely voters from 16 to 22 October how they would vote. 46% would vote yes on Prop 40 and 52% no, with a margin of error of ±3.8 points. In September, the same question had 52% for and 46% against.

Likely voters who would vote yes, PPIC Statewide Survey, %. Source: Public Policy Institute of California, Statewide Survey, September and October 2026; likely voters, after reading the ballot title and label. October fieldwork 16–22 October, 1,086 likely voters.

Prop 40, September	52
Prop 40, October	46
Prop 41, September	51
Prop 41, October	48
Prop 42, September	54
Prop 42, October	51

Source: Public Policy Institute of California, Statewide Survey, September and October 2026; likely voters, after reading the ballot title and label. October fieldwork 16–22 October, 1,086 likely voters.The Macro Notebook

The split is partisan. More than six in ten Democrats would vote yes, against four in ten independents and about two in ten Republicans. Support is highest among voters aged 18 to 34 (70%), those earning less than $40,000 (64%) and Latino voters (58%). Prop 41 stood at 48% for and 49% against, and Prop 42 at 51% for and 47% against: the only one of the three with a majority in October.

The survey lists the sides. Senator Bernie Sanders and SEIU United Healthcare Workers West back Prop 40 and oppose the other two. The California Primary Care Association, the California School Boards Association and the California Taxpayers Association oppose it.

When does Prop 40 take effect?

Not on election night. An approved initiative takes effect on the fifth day after the Secretary of State files the official statement of the vote, the constitution says. The tax itself would fall due in 2027.

Polls are not results, and the October survey closed twelve days before the vote. What it shows is a measure that lost support between September and October, facing a rival that held a majority. The measure is already moving money. As we reported on 23 October, Meta agreed to create shares Mark Zuckerberg could sell to pay the tax without losing control of the company. California’s vote matters for the state’s budget, and for whether other states try a tax on wealth.