The Proposed Wealth Tax and California’s November Ballot
On November 3, voters across California will cast ballots on Proposition 40, a proposed initiative that would levy a one-time 5% wealth tax on roughly 260 billionaires living in the state. The measure requires a simple majority to pass and seeks to direct 90% of its generated revenues toward public healthcare funding for low-income residents in need. Opponents of the initiative, led by Silicon Valley tech executives and top state officials, have assembled a campaign war chest exceeding $340 million to defeat the proposal, while proponents have been out-fundraised by a ratio of nearly ten to one. Opponents have also placed two alternative statewide initiatives on the ballot that, if passed, would nullify Proposition 40 and prohibit the implementation of similar wealth taxes in the future. Hindustan Times reported that Google co-founder Sergey Brin alone contributed $102 million toward the nullification effort, an amount equivalent to roughly $2.60 per California resident, and accounts for nearly half of the total funds raised to defeat the wealth tax.
The initiative comes at a time when voters are confronting expansive and lengthy state and local ballots. In Los Angeles, the physical ballots stretch across nine pages, contributing to what some observers describe as voter fatigue. Polling data collected by the Public Policy Institute of California indicates that voter support for Proposition 40 has declined as the election date approaches, dropping to 46% in recent surveys down from 52% recorded in September. Earlier in the summer, polling conducted among registered California Democrats showed approval for the one-time billionaire tax exceeding a four-to-one margin. Despite that early popularity among the party base, opposition from prominent Democratic figures and an influx of opposition advertising have coincided with the downward trend in public polling.
Supporters of the ballot initiative argue that the tax is necessary to protect vulnerable residents from severe federal spending cuts. The proposition was originally crafted by Dave Regan, president of SEIU-United Healthcare Workers West, in direct response to healthcare funding reductions enacted under President Donald Trump’s One Big Beautiful Bill Act passed last year. According to reporting by The Guardian, citing reporting from The New York Times published this month, California is projected to lose approximately $100 billion in federal Medicaid funding over the next five years. That reduction threatens healthcare access for millions of low-income Californians and creates the risk of hospital closures and facility cutbacks across the state.
While the national Republican platform during this midterm election cycle has focused heavily on attacking socialist policies and raising concerns regarding Muslim public figures, the debate within California has centered on the concentration of high-net-worth wealth. Out of roughly 1,000 billionaires residing in the United States, more than 200 live in California. Supporters of Proposition 40 contend that taxing this group is a straightforward solution to budget shortfalls, but critics emphasize that the policy risks destabilizing the broader tax base if targeted individuals choose to change their legal residency.
High-Stakes Funding Needs and Economic Flight Debates
The core policy disagreement over Proposition 40 centers on whether taxing extreme wealth will generate public revenue or prompt an exodus of high earners that harms the state's innovation economy. California Governor Gavin Newsom, a term-limited Democrat who previously opposed wealth tax legislation introduced by the Democratic supermajority in the state legislature, tried to keep Proposition 40 off the November ballot and is currently campaigning actively against it. Speaking to reporters recently during a trip to New Hampshire, Newsom stated, “I don’t think it’s a good idea to do it at state level,” adding that in his view, “It’s a badly written initiative.” Newsom has argued that approving the 5% levy would induce many of the state's more than 200 billionaires to leave California, resulting in fiscal fallout for state tax revenues. Instead of state-level measures, Newsom has expressed general support for reforming the federal tax code to extract more revenue from high earners, though he has offered few specific details regarding how such federal changes should be structured.
Advocates for the measure dispute the governor's warnings regarding mass billionaire migration. Journalist Harold Meyerson noted that public warnings of wealthy residents fleeing after tax increases rarely materialize in practice. Citing research published by the National Bureau of Economic Research, Meyerson pointed out that the estimated $100 billion in potential revenue generated by Proposition 40 would not be offset by lost income tax payments—even if all 200 California billionaires departed immediately—until 25 years had passed. Furthermore, the economic paper documented that if 50 of the state's billionaires relocated out of California, it would take a full century for the lost income tax revenues to surpass the initial revenue gained from the wealth tax.
The debate has also engaged former state political leadership. Jerry Brown, who served two separate eight-year spans as California governor before Newsom took office in 2019, has refrained from endorsing or opposing Proposition 40. Responding to an email inquiry in late October regarding his position on the measure, Brown wrote: “I have not discussed the proposition. There is already a plethora of opinions on the measure.” In 1979, during his first stint as governor, Brown said: “The way you have to approach the political process is something like piloting a canoe.” He explained: “If you paddle a little bit on the left side, then you paddle a little bit on the right side, you keep going right down the middle.”
However, during an interview with the BBC several weeks ago, Brown commented on growing wealth disparities, stating: “The gains for those who succeed at the top are getting bigger and richer, and the sustenance at the bottom and the middle is getting less and less.” Brown argued that while systemic reform is necessary, single-state initiatives face structural limits: “We obviously need a wealth tax. If Tesla wants to give Elon Musk a trillion dollars over 10 years, then the people have to take back 99% of it. Now, can you get that? No, not at this point. Can you get it in one state? No, that would not work. Can you get it in one country? Probably not. So it would take an international agreement to tax the very wealthy, so that you can’t accumulate at the level that they are today.”
Intra-Party Rift Among Democratic Leadership and Lawmakers
The battle over Proposition 40 has highlighted sharp divisions between the executive leadership of the Democratic Party and its progressive grassroots base. In early August, the executive board of the California Democratic Party voted formally to endorse Proposition 40. Despite that official endorsement, Governor Newsom has continued to fight the initiative while promoting the alternative billionaire-backed ballot measure designed to block future wealth taxes. Other top state Democratic leaders have joined Newsom in opposing the measure, including Xavier Becerra—the state's former attorney general and current federal official who is considered a near-certain candidate to succeed Newsom as governor—and Los Angeles Mayor Karen Bass.
Meanwhile, several prominent California Democrats holding national office have chosen not to state a public position on Proposition 40. United States Senators Alex Padilla and Adam Schiff have remained silent on the measure, as have former Vice President Kamala Harris and former House Speaker Nancy Pelosi. Noting this silence in mid-October, the San Francisco Chronicle reported: “Neither wants to alienate wealthy donors or their allies in labor by publicly opposing it.” The newspaper added: “But their silence on such a high-profile measure is giving cover to the billionaires” fighting the measure.
Commentary from progressive organizers inside the state attributes this executive opposition to political fundraising strategies. Amar Shergill, a Sacramento-based attorney and former chair of the California Democratic Party’s Progressive Caucus, offered a critical assessment of the state's leadership alliance with technology executives. “When it comes to Newsom and Becerra opposing the billionaire tax,” Shergill stated, “you need know only two things. First, Newsom needs billionaire money for his presidential campaign. Second, Becerra needs to pay back the billionaires that made him governor. The rest of the corporate Democrats in office are some version of these stories.”
Out of the 45 Democratic members representing California in the United States House of Representatives, only two are listed as official endorsers on the Proposition 40 campaign website. According to The Guardian, one of them, Representative Ro Khanna, who represents part of Silicon Valley, has emerged as California’s most visible and vocal politician advocating for Prop 40. Speaking during an interview on MS Now, Khanna declared: “It’s the most important ballot initiative in America and in the world.” He asked: “Are we going to continue to cater to a donor class that has hollowed out jobs, hollowed out the working class, and lost us two elections to Donald Trump?”
In an interview with writer Norman Solomon—the director of RootsAction, executive director of the Institute for Public Accuracy, and author of The Blue Road to Trump Hell: How Corporate Democrats Paved the Way for Autocracy—Khanna framed the debate. “This is a fight for the soul of the Democratic party,” Khanna said. “Will we be beholden to billionaire donors and offer platitudes without policy like Gavin Newsom, or will we reclaim our FDR courage and offer a bold vision for our nation’s future?” Solomon noted that exactly 90 years ago, speaking at Madison Square Garden on the last day of October 1936, then-President Franklin Delano Roosevelt scorned right-wing plutocrats, declaring: “They are unanimous in their hate for me – and I welcome their hatred.”
Union Fractures and Allegations Over Initiative Origins
The conflict over Proposition 40 has also divided labor organizations across California, creating friction among groups that historically coordinate on state ballot campaigns. While the measure was authored by Dave Regan of SEIU-United Healthcare Workers West to secure funds for healthcare clinics and hospitals, several other labor unions in the state have formally lined up in opposition to the tax.
Opposing labor representatives have publicly accused Regan of utilizing aggressive tactics, alleging that he engaged in bullying and harassment against fellow union leaders in an attempt to coerce their support for the ballot initiative. Regan has rejected these characterizations, labeling the accusations “a shoot-the-messenger smear campaign.” Defending the initiative, Regan argued that opposing labor groups “should be ashamed of themselves” for choosing “to carry water for Governor Newsom and the billionaires” rather than backing dedicated funding for low-income healthcare services.
This inter-union dispute coincided with public appearances by national progressive figures campaigning for the measure. At a political rally held in Los Angeles, Vermont Senator Bernie Sanders joined Representative Khanna to campaign on behalf of Proposition 40. Sanders declared Prop 40 to be “the most important ballot item in the country.” Addressing the gathering, Sanders said: “Let me tell the billionaires that what you guys are doing in California is not the end.”
This report was prepared with AI assistance and checked against the sources it relied on. Read our editorial standards and methodology.
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