California voters face a decision on Proposition 40, a ballot measure that would impose a one-time 5 percent tax on the net worth of residents worth at least $1 billion as of January 1, 2026, with the tax calculated based on assets as of December 31, 2026.

The measure, placed on the November 3 ballot by the Service Employees International Union-United Healthcare Workers West, targets roughly 200 to 250 billionaires. It excludes most real estate, pensions, and retirement accounts from the taxable base while including stocks, private business interests, art, and other assets. Revenue would flow primarily to state-funded health care programs, with smaller portions for education and food assistance.

Recent polling shows the proposition in a tight contest. A Citrin Center-POLITICO survey released October 19 found 46 percent of likely voters in support and 43 percent opposed, with about 10 percent undecided. Support has remained stable over the past month despite campaign efforts.

Opponents have spent hundreds of millions of dollars, including backing competing measures Propositions 41 and 42 designed to block or invalidate the tax even if Prop 40 passes. Several prominent billionaires, including Larry Page and Sergey Brin, reportedly left the state before the residency cutoff date.

The nonpartisan Legislative Analyst's Office estimates the tax could generate tens of billions of dollars in temporary revenue over several years. Actual collections remain uncertain due to asset value fluctuations and potential taxpayer responses, such as relocation or asset restructuring. The office also projects a possible ongoing reduction in state income tax revenue of less than $1 billion annually.

Supporters argue the tax would offset federal funding shortfalls for Medi-Cal and other programs. Critics highlight risks of capital flight and note that the measure applies retroactively to residents as of the start of 2026.

Early voting has begun in California, with the election concluding November 3. The outcome will determine whether the state becomes the first to enact such a targeted wealth levy.