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1Fix the driver behind crashes, sound loss and screen glitches2Repair Windows errors before they cause bigger problems3Scan for outdated or missing drivers - takes under a minuteCalifornia’s Democratic Party has endorsed Proposition 40, a one-time tax on billionaires, but Gov. Gavin Newsom and other prominent Democratic allies oppose it. The split is about more than party leadership: supporters see a way to direct accumulated wealth toward public services, while opponents warn that the measure could threaten future state revenue if wealthy residents change their behavior or leave.
What Proposition 40 would do
Proposition 40 is a proposed one-time tax, not an annual wealth tax. It would charge 5% of net worth to billionaires who were California residents on January 1, 2026. Payment would be due in 2027. Taxpayers could spread payments over five years, but the initiative would charge more for that option.
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Real estate, pensions and retirement accounts are generally excluded. The measure’s central criteria are the taxpayer’s billionaire status and California residency on the specified date. It has not taken effect; voters will decide it on the November 3, 2026 general election ballot.
Where the money would go
Ninety percent of the proceeds must be used for public health-care services. The remainder is designated for education, food assistance and administration of the tax. The state would decide how and when to spend the money within those categories; the measure does not specify a fixed schedule for each program.
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The initiative names health care, K–14 public education and food assistance as purposes. Its argument for the tax says a substantial share of billionaire wealth is not taxed as income until assets are sold. That is the initiative’s rationale, not a finding by the state’s fiscal analysts.
How much revenue is at stake—and what is uncertain
The California Legislative Analyst’s Office (LAO) estimates that Proposition 40 could generate tens of billions of dollars in temporary revenue spread over several years. It does not give a reliable point estimate for final collections: the amount and timing are difficult to predict because taxpayers may change their behavior and much of the taxable wealth is tied to stock prices that fluctuate.
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The LAO also estimates that responses such as billionaires leaving could reduce state income-tax revenue by less than $1 billion per year. It estimates administering the tax could cost tens of millions of dollars per year for several years. These are forecasts, not observed costs or revenue losses; the tax has not been implemented, and the analysis does not establish how many taxpayers might leave.
Why Democrats are on opposite sides
Supporters’ case
Supporters argue that a one-time tax on billionaire wealth could help address health-care and other public-service needs. The California Democratic Party has endorsed Proposition 40. U.S. Sen. Bernie Sanders and SEIU United Healthcare Workers West are also listed among its supporters in the California Secretary of State’s official voter guide.
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At a recent California rally, Sanders framed the choice this way, as quoted by the Associated Press: “Brothers and sisters, that is the question on the ballot.”
Opponents’ case
Opponents say a one-time collection could create budget risks in a state that depends heavily on high earners, particularly if wealthy residents move or alter their tax behavior. The LAO acknowledges the possibility of reduced future income-tax revenue, while emphasizing the uncertainty and estimating that the reduction would probably be below $1 billion per year.
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Newsom and several other prominent Democrats oppose the measure. The official voter guide lists the California Primary Care Association, California School Boards Association and California Taxpayers Association among opponents. The disagreement therefore does not divide neatly by party label, nor do all health and education organizations take the same position.
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What polling and campaign spending show
A Berkeley Institute of Governmental Studies survey released March 19, 2026, found that 52% of registered voters said they would vote yes, 33% no and 15% were undecided after receiving a summary of the proposal. Among Democrats, 72% said yes. This is an early poll tied to its date and wording, not a forecast of the November result or a measure of current October opinion.
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Campaign spending figures also capture a moment rather than a fixed total. On October 9, 2026, the Associated Press reported, citing AdImpact, that opponents had spent or booked roughly $96 million for airtime and digital messaging, compared with $209,000 by supporters. Those time-sensitive figures describe spending or bookings reported at that point, not the final campaign totals.
How the ballot choice works
A yes vote means California would collect the one-time tax under Proposition 40; a no vote means it would not. There is an additional ballot complication: according to the official analysis, Proposition 41 or Proposition 42 could prevent Proposition 40 from becoming law if either receives more yes votes, even if Proposition 40 itself wins a majority. That interaction is part of the stated ballot mechanics; it does not establish how any legal dispute over the measures would be resolved.
For voters weighing the arguments, the key distinctions are the tax’s one-time design and 2026 residency date; its designated public-service uses; the LAO’s uncertain revenue and behavioral-response estimates; and the possible interaction with Propositions 41 and 42. Party endorsement, individual Democratic officials’ positions, early polling and campaign spending each answer different questions—they should not be treated as interchangeable measures of what the electorate will decide.
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