2026-10-23 · contested story
Taxes On the Rich Are On the Ballot. Could It Be Federal Trend?
California's Proposition 40 — a first-in-the-nation, one-time 5% wealth tax on the net worth of roughly 200-255 billionaires residing in the state as of January 1, 2026 — has become one of the most expensive ballot fights in state history. Spearheaded by the healthcare workers' union SEIU-UHW, the measure would direct about 90% of revenue (estimated between $40 billion and $100 billion depending on who you ask) to offset federal Medicaid cuts from Trump's One Big Beautiful Bill Act, with the rest for education and food assistance. Billionaire-funded opposition, led by Google co-founder Sergey Brin's $102 million donation to 'Building a Better California,' has raised roughly $300-340 million — about ten times the 'yes' side — while also bankrolling two poison-pill countermeasures (Props 41 and 42) that would nullify Prop 40 even if it passes. The fight has split Democrats, with Gov. Gavin Newsom and gubernatorial candidate Xavier Becerra opposed while Sen. Bernie Sanders and Rep. Ro Khanna champion it. A parallel 'millionaire tax' debate plays out in Colorado (Amendment 87), Washington, Massachusetts and elsewhere.
How each side frames it
left
"Are we destined to live in an oligarchic society begging for crumbs while our economic and political lives are controlled by a handful of the wealthiest people on Earth?"
"a turning point in the battle between democracy and oligarchy"
"The billionaires went too far supporting the American gestapo... They're not just sitting at a table with an alleged Nazi. They're sitting at a table with an alleged predator, sex trafficker, and pedophile"
"America's 977 billionaires now control a record $9.24 trillion. In just one year, their wealth increased by $2.2 trillion, or 32%, while the overall economy grew by about 6%"
"Before this country starts messing around with major wealth taxes (which have a miserable track record in other countries), we ought to tax high incomes—not just billionaires—at a much higher rate"
center
"What these questions have in common is that their answers are fundamentally unknowable. At some level, then, many people's position on Proposition 40 isn't a mathematical question but a political question."
"Among 105 respondents, 69.5 percent opposed the proposal, including 71.0 percent of economists and 85.0 percent of accountants. Lawyers were more supportive, with 60.0 percent favoring the tax."
"Proponents of the measure say it could raise roughly $100 billion... The authors of a study from conservative-leaning Hoover Institution... estimate $30 billion in new revenue"
"I'm not sure that you can say, with full security, that this will stop clinics from being closed or healthcare workers from being laid off, or people from losing their healthcare"
"If Prop. 40 fails, we'll never know what its consequences would be, just as Prop. 13 was a shot in the dark and its history is still being written."
right
"these leftwing ideologues are hurting the least mobile people in their state, people stuck in a dead economy with few options"
"Buried in the fine print is a provision allowing the California legislature to expand the tax—lowering the threshold, adding asset categories—by simple majority vote, without voter approval."
"We've already seen the out-migration of the state's billionaires and businesses begin. If the measure passes, lawsuits will be filed instantly."
"I just didn't feel welcomed as an entrepreneur... why would I move to a state where the government is basically, first of all, villainizing entrepreneurs"
"Wealth taxes have been a failure everywhere they've been tried... Of the 12 countries across the Organisation for Economic Co-operation and Development that had wealth taxes in 1996, just five have them in place today."
What each side left out
The left left out — covered by the TaxProf Blog & Times of San Diego (KFF) & Orange County Register
- The TaxProf survey showing 71% of economists and 85% of accountants oppose Prop 40
- The OECD track record of repealed wealth taxes
- Concerns that revenue may not actually reach healthcare/clinics as promised
The left left out — covered by the Yahoo Finance & The Times of India & CNN
- That several named billionaires (Brin, Page) genuinely relocated before the tax, and Zuckerberg sought a special stock class to pay it
The right left out — covered by the Common Dreams & HuffPost
- That California attracted 80% of US venture capital in 2026 after Prop 40 was announced, undercutting the 'doom Silicon Valley' claim
- That billionaires paid only ~1.6% of wealth gains in state income tax 2019-25
The right left out — covered by the CNN & Boston Herald (AP) & Vox
- That the tax applies to residents as of Jan 1 2026, making mass avoidance-by-flight largely impossible within the one-month window
- Cristobal Young's research finding little tax migration from prior millionaire taxes
The center left out — covered by the The New Republic & Common Dreams
- The explicitly populist/anti-oligarchy emotional stakes and the Epstein/Trump-donor angle driving grassroots energy
The left left out — covered by the CNBC & LA Times & Yahoo Finance
- Rauh/Hoover central-scenario estimate that lost income taxes yield a net present value of negative ~$25 billion
What's actually true?
[verified] Proposition 40 would impose a one-time 5% tax on the net worth of California residents with over $1 billion in wealth, applying retroactively to those resident as of Jan 1, 2026.
[verified] Google co-founder Sergey Brin contributed at least $102 million to 'Building a Better California,' the leading opposition group.
[verified] Opposition efforts raised roughly $300-340 million, approximately ten times the 'yes' campaign's ~$33 million.
[contested] Revenue estimates diverge sharply: proponents (Saez/Zucman, ITEP) project ~$100 billion over five years; the Hoover Institution's Rauh projects ~$30-40 billion and a possible net loss of ~$25 billion when lost income taxes are counted.
[verified] A survey of 105 tax experts found 69.5% opposed Prop 40, including 71% of economists and 85% of accountants, while 60% of lawyers supported it.
[verified] Six Nobel Prize-winning economists (Acemoglu, Banerjee, Diamond, Duflo, Krugman, Stiglitz) signed an open letter endorsing Prop 40.
[verified] Gov. Gavin Newsom opposes Prop 40 and endorsed Proposition 42, a competing measure that would nullify it and ban future wealth taxes on personal property.
[contested] Massachusetts' 2022 millionaire surtax raised billions for education/transportation and did not trigger a mass exodus, per proponents; opponents cite IRS data showing ~13,000 high-earners lost 2021-2023.
The narrative clash
Whether the tax nets revenue or loses money for California
Left: An analysis by the Institute on Taxation and Economic Policy estimates that the tax will raise $100 billion in revenue over the next five years, which would be enough to fill the hole in California's state budget
Right: permanently lost income tax collections from departures more than offsets the one-time wealth tax revenue, yielding a net present value of negative $38.9 billion
Whether wealthy residents actually flee over taxes
Left: previous California tax increases on millionaires didn't lead to a mass exodus of wealthy people. 'These really high-income folks — they're already doing great, and they don't need to move somewhere else'
Right: A Golden State ballot measure that would levy a one-time 5% tax on people with a net worth of $1 billion or more has entrepreneurs headed for the exits. They're taking their ideas, businesses and jobs with them.
Whether the tax can expand to non-billionaires without a vote
Left: it requires that any such changes be made through a vote of two-thirds of the members of each legislative chamber. That's the same requirement applied to any changes in California taxes, so the initiative doesn't give lawmakers any authority
Right: a provision allowing the California legislature to expand the tax—lowering the threshold, adding asset categories—by simple majority vote, without voter approval
Whether Silicon Valley / investment is being harmed
Left: in 2026, after Prop. 40 was announced, California has attracted 80% of the nation's venture capital funding, compared to just 50% prior to 2025
Right: To create and implement an asset tax on top of that is going to drive, and is driving, the job creators that we have in this state out of here.
106 sources analyzed
The New Republic PBS NewsHour CNBC Orange County Register The Daily Signal The New Republic CNN Complete Colorado Boston Herald National Review HuffPost PBS NewsHour View from the Wing RealClearMarkets National Review Vox The Washington Post Le Monde.fr Boston Herald Fox News Common Dreams NBC News FlowingData Boston Herald National Review Vox Los Angeles Times The Capital Times Boston Herald National Review Salon PBS NewsHour Truthout Fox Business The Daily Signal Vox Politico Pacific Research Institute Richmond Times-Dispatch Common Dreams NBC News California DSA New York Post Salon NBC News WPEC MSNBC The Washington Post Pleasanton Weekly The New Republic The Colorado Sun The Lever Common Dreams NBC News TaxProf Blog Common Dreams Sacramento Bee Bloomberg Government News MSNBC CNN SummitDaily.com MSNBC The Guardian Annenberg Media Vox Colorado Times Recorder UA.NEWS Salon NBC News Yahoo Finance MSNBC The Washington Post CalMatters Salon CNN KKTV PBS NewsHour Independent Institute CNN Kiowa County Press The Sum and Substance The Press Democrat Newsroom | UCLA KSJD The Denver Post Times of San Diego KKCO 11 News KJCT Law360 BusinessDen KGNU Mustang News AOL.com Big News Network.com Denver7 The Times of India CBS News www.insideflyer.com Yahoo SuaraGarut.ID GuruFocus Live and Let's Fly KSLM Radio Rocky Mountain Voice - The Aviation Hub Simple Flying