Volunteers running into the thousands have fanned out across California, collecting signatures in support of a proposed levy on accumulated wealth — a type of tax the state has never before put to voters — that is scheduled for the November 3 ballot.
Those backing Proposition 40 — a measure designed to generate revenue that would offset reductions in federal funding for health care, education, and food assistance — are mounting a spending battle against high-net-worth individuals whose tax obligations would grow under the proposal and who have channelled hundreds of millions of dollars into rival ballot campaigns.
Analysts at Arizona State University's Center for Work and Democracy, together with other researchers, described the California ballot measure — brought forward in October by economists Emmanuel Saez and Robert Reich alongside United Healthcare Workers West, a Service Employees International Union affiliate representing around 145,000 health care workers throughout the state — as the first wealth tax passed through a citizen-initiated process anywhere in the country, and the first measure of its kind worldwide to focus narrowly on billionaires. Benjamin Case, who directs the Ballot Initiatives Project at that center, added that whatever the eventual result, the measure has set a new reference point for what voters can pursue through direct democracy when it comes to taxing concentrated wealth.
Under the label "Billionaire Tax Act," Proposition 40 would impose a single-occurrence 5 percent levy on the full net wealth held by each billionaire residing in the state, calculated against a retroactive residency threshold set at January 1, 2026. The measure would affect around 200 individuals whose net worth places them in the billionaire bracket, a group that includes tech-world names such as Mark Zuckerberg and Peter Thiel.
Over the past four decades, that group's yearly earnings climbed at roughly 7.5 percent annually, a trajectory that unfolded as pay for typical workers remained largely flat and an expanding portion of the population found it harder to cover everyday expenses. Income and property tend to draw the bulk of tax collection, leaving accumulated wealth largely outside the standard levy structure.
That figure is designed to account for an individual's total assets — property, cash on hand, and equity holdings — with outstanding liabilities subtracted from the sum. Though a handful of European countries have put levies on personal wealth into practice, such policies have yet to take hold broadly across the rest of the world.
Data drawn from Norway's experience with a comparable levy on high-end wealth showed neither a measurable departure of the very wealthy from the country nor any dampening effect on entrepreneurial activity among founders. The analysis found that business owners who relocated out of Norway under the tax program generally kept their operations there and continued putting money into the country — a finding that sits alongside a separate observation: California's top income tax bracket reaches every earner above roughly one million dollars a year, even though the state's wealthiest billionaires collectively hold net worth estimated somewhere around $250 billion.
Spanning an estimated five-year revenue horizon of around $100 billion, the ballot measure draws on a taxation framework that Chris Hoene — who leads the California Budget and Policy Center — characterised as having no established precedent: a structure in which even a fractional rate applied to holdings worth hundreds of billions would pull in far more public revenue than a million-dollar annual income produces, and where a relatively low levy on concentrated assets could still channel considerable sums into government coffers.
Roughly 90 percent of those funds would go toward offsetting a projected reduction in Medicaid financing for California's 15 million program enrollees — losses tied to provisions in the One Big Beautiful Bill Act signed by President Donald Trump — over that same window of time. The legislation lowered tax rates primarily for higher-income earners and is projected to reduce funding available to health care and social services programs across the country.
Forecast figures place a roughly $100 billion shortfall in California's Medi-Cal programme over the coming five-year window — a gap that, according to analysts, threatens to strip health coverage from upwards of a million state residents while pushing community clinics toward closure.
The SEIU has put the number of potentially displaced health care workers at 145,000, while Renee Saldaña, press secretary for United Healthcare Workers West, told a news outlet that staff stationed inside patient facilities are already observing the effects firsthand, with patients expressing concern about whether they will be able to cover the cost of their medications. Whether a patient retains access to their regular physician remains an open question.
Julie Van Winkle, vice president of the American Federation of Teachers for United Teachers Los Angeles, noted that union members — drawn from its roughly 37,000-strong roster — had been out knocking on doors in support of Proposition 40, with Van Winkle describing a shared sense of urgency among them and conveying that residents were telling their physicians they faced difficulty covering both food and medical costs. Under the measure, around one-tenth of the revenue it would raise would flow toward K–12 schools and food assistance initiatives, areas where federal funding has been reduced.
Backing for Proposition 40 spans a broad coalition of labour unions, health care organisations, and groups focused on economic and social justice across the state. Outreach for the ballot measure drew backing from across the California Democratic Party's ideological spectrum, with both establishment and progressive voices participating in the push for votes — Sen. Bernie Sanders among them, having taken the stage at gatherings in San Francisco and Los Angeles during the first weeks of October.
Newsom, who serves as California's governor, parted ways with fellow Democrats in his state by speaking out against the measure and calling on voters to reject it. On October 9, Newsom added his support to Proposition 42, a rival measure that Hoene described to a news outlet as "a direct assault on Proposition 40," with Newsom among a group of wealthy donors who together have put close to $250 million toward advertising opposing Proposition 40 and funding both Proposition 42 and Proposition 41, two competing measures that would counter the billionaire tax.
Where Proposition 40 would levy taxes on certain asset classes, Proposition 42 would place a prohibition on any new levies tied to holding those same assets. Under the same provision, applying taxes with retroactive effect would be barred. Under a higher-vote threshold, the measure would strike down the tax on wealthy individuals.
Proposition 41 would add a layer of oversight to the special-tax approval process, requiring the state auditor to examine any such proposal before it reaches the ballot. Under the proposal, money collected through dedicated special taxes would be counted within the state's expenditure ceiling rather than set aside, a change that carries the potential to activate automatic refund mechanisms.
Hoene told a broadcast outlet that the wording of both competing measures and their respective ad campaigns appeared structured in a way that would leave California voters uncertain about what they were supporting, adding that those behind the effort to defeat Proposition 40 had put forward a particularly inaccurate case against it.
A September poll conducted by the Public Policy Institute of California showed that narrow voter majorities — drawn from those considered likely to cast ballots — backed each of the three measures. Among all measures tracked in that survey, Proposition 42 drew the broadest backing, with 54 percent of respondents indicating their support. Proposition 40 held a narrow lead at 52 percent, while Van Winkle told a broadcast outlet that the campaign faced a steep fundraising gap against its opponents, though he noted that volunteer ground support remained a strength his side intended to use.
Saldaña told a news outlet that union members each carry responsibilities ranging from phone outreach to mobilising their own networks and collecting petition signatures, adding that the drive to see the effort through — particularly among the frontline healthcare workers the union represents — has been running at an exceptionally high level.
Saldaña told a broadcast outlet that door-to-door canvassers for the union had encountered widespread backing for the wealth tax at most households visited, with residents often needing little persuasion — many responding immediately with support when the measure was mentioned. She also noted a broader mood among voters that the current economy was leaving ordinary people behind, and that there was growing frustration with wealthy individuals attempting to shape electoral outcomes while avoiding accountability. Van Winkle indicated she anticipated organizers across the state would remain active through the close of polls on November 3, stating that those holding the greatest concentrations of wealth in one of the most prosperous places on earth had an obligation to contribute proportionally, so that working people facing rising costs for fuel, housing, and food could maintain a decent standard of living.
