Proposition 40 would authorize a one-time 5% wealth tax on California residents with a net worth above $1 billion, with the vote set for November 3. A September UC Berkeley IGS poll found 45% of likely voters backing it and 42% opposed, while a Mason-Dixon poll for NBC Universal and Telemundo showed a 10% Yes advantage. Prediction markets Kalshi and Polymarket put the odds of passage below 30%. Most revenue would fund state healthcare programs to offset cuts from the One Big Beautiful Bill Act; supporters estimate about $100 billion, while the Hoover Institution estimates $30 billion. Critics warn that billionaires could leave the state, and the nonpartisan fiscal advisor estimates a possible ongoing decrease of less than $1 billion per year in state income tax revenue from billionaires.
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- It’s not just California’s billionaire tax. Wealth is on the ballot in the midterm elections.
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Stanford economists Benjamin Jaros and Joshua Rauh argue in an NBER working paper that California's proposed one-time 5% tax on billionaire wealth could raise far less than projected and ultimately reduce state revenue. Seven billionaires, including Peter Thiel, Larry Page and Sergey Brin, have publicly left the state, removing about $540 billion, or 30%, of California's billionaire wealth from potential taxation. The authors estimate the measure could generate only about $30 billion, versus the $100 billion projected by proponents, while losing $1 billion to $3.5 billion a year in income tax revenue could leave the state about $39 billion worse off in present-value terms if those losses persist. The measure, Proposition 40, goes to voters next month, and a Citrin-Politico poll found 46% of likely voters in favor and 43% opposed. Supporters, including Nobel laureates Daron Acemoglu and Joseph Stiglitz, argue the tax will fund health care and that California has attracted more venture funding since the proposal was announced.
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- A New Flat ( Sort of ) Tax Proposal for California
Economists Robert E. Hall and Michael Woodford, winners of the 2026 Nobel Prize in Economics, have proposed a near-flat tax scheme for California based on Hall and Alvin Rabushka's plan. Under it, businesses and households both pay a flat 19% rate: businesses are taxed on profits excluding wages, pension contributions and capital investment, while households pay 19% only on wages above an adjustable exemption, keeping the system progressive. The article cites a 1985 version in which a family earning $25,000 paid an average rate less than half that of the highest earners. The author notes that this is still a tax on income and recalls that the federal FairTax consumption-tax proposal never advanced in Congress. California voters will decide in November on a one-time 5% tax on assets above $1 billion, which Manhattan Institute polling suggests is likely to fail.
- What to know about California other tax - the - rich measure : Prop . 3
Proposition 3 would permanently extend California's income tax on people earning over $371,000 a year (or couples earning over $743,000) to fund schools, healthcare and other state services. The tax first appeared in 2012 as temporary, was renewed in 2016 and expires in 2031, generating between $5 billion and $15 billion a year depending on market conditions. If passed, the top rate would stay at 12.3%, and with the additional 1% mental health tax, the highest earners would pay 13.3%, the nation's highest. Backers led by the California Teachers Association have raised more than $40 million, while opponents, including taxpayer groups such as the Howard Jarvis Taxpayers Association, have raised $5,500. A September poll found 58% of likely voters planned to vote yes, but opponents argue schools need less funding amid declining enrollment and that high taxes could drive wealthy residents out of the state.
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Nvidia CEO Jensen Huang said in a CBS interview on October 20 that he doesn't mind paying taxes and views his expected $8 billion in taxes over five years as a 'privilege,' as California weighs a 5% levy on wealthy residents' total assets. His comments come as billionaires such as Sergey Brin and Eric Schmidt oppose the plan, while Peter Thiel and Mark Zuckerberg have left the state for lower-tax locations. Huang, worth over $187 billion according to Forbes, said he could not have succeeded without the opportunities America offers and called California a hub of talent. The initiative needs more than 870,000 signatures to reach a November vote, and would let billionaires pay the tax over five years.
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