TAXING QUESTIONS, CONTINUED
Published in the July 18, 2026 edition.
“We Have Two Options: Tax the Rich or Eat the Rich.”
That rather ominous message succinctly summarizes the festering anger about the gap between the ultra-rich and everyone else in the United States.
California voters will get a chance to forestall the cannibalistic approach to closing the wealth gap at the polls this November by approving Prop. 40, a ballot question that would impose a one-time tax of 5% on the state’s billionaires.
There are roughly 200 billionaires in the state (which is mind-boggling in itself). The 5% levy would generate $100 billion (can’t even imagine that number) with 90% going to healthcare to backfill cuts to Medicaid enacted by the Trump Administration and 10% going for food assistance and education.
Oh, and it would be imposed retroactively on billionaires living in California on Jan. 1, 2026, so those ultra-rich folks who slinked away to Texas or Idaho or other states to avoid the tax will still get docked.
Sounds simple enough.
Complicating the whole endeavor are two “poison pill” propositions also on the November ballot that would essentially block enforcement and collection of any approved “Billionaires Tax.” Tech bros and their billionaire buddies are not going to go quietly into that taxing night, and even lefty liberal politicians, hello, Gov. Gavin Newsom, are opposing the tax measure.
So voters should be prepared to be absolutely pounded with advertising and mailings and online arguments on all sides of this issue.
Prop. 40 was crafted by the Service Employees International Union-United Healthcare Workers West, which spent $31 million to gather 1.6 million voter signatures to put the tax on the ballot.
That $31 million is pocket change to the state’s billionaires who easily rounded up about $100 million up to defeat Prop. 40 and push the two anti-40 ballot measures through their Building Better California. Google co-founder Sergey Brin donated about $82 million to the group, then moved out of California to avoid possible higher taxes.
Opponents claim the new tax is a one-shot infusion of cash that will do little to create a long-term, sustainable funding stream for healthcare. A joint statement from leaders of the California Medical Association, California Primary Care Association and California School Boards Association, states: “The dangerous wealth tax directly threatens vital funding for education and schools, healthcare and clinics, public safety, and infrastructure projects by making California’s revenue even more volatile.”
Unions supporting the measure include Teamsters California and AFSCME California.
Newsom and other opponents say the initiative would drive the ultra-wealthy out of the state and their departure would blow a hole in the state budget. The Legislative Analyst’s Office said the measure would “likely” result in an “ongoing decrease in state income tax revenues of hundreds of millions of dollars or more per year.”
In an interview in the LA Times, Regan, of the healthcare workers union, said the new tax is needed because Trump’s “Big Beautiful Bill” will gut the state’s healthcare resources by taking “between $20 and $25 billion annually out of our healthcare system, meaning three and a half million people are going to lose insurance, 150,000 health care workers will be laid off.”
That’s a lot to chew on.
Next on the electoral plate are the two “poison pill” ballot measures that supporters want voters to swallow because approving either one would scuttle approval of the Billionaire’s Tax. (Lawyers are salivating at the prospect of a split vote.)
Prop. 41, if approved, would mandate any new state taxes (such as the Billionaire’s Tax) would not be exempt from the constraints of the state government spending limits (Gann Limits), which is a key feature of the Billionaire Tax. That would effectively void the Billionaire Tax, even if it was approved by voters. Prop. 41 also forces state audits of any program that might receive additional tax revenue through a ballot measure, and make those programs cancel out their “lowest performing” programs.
Prop. 42 would prohibit any new taxes on all the assets listed for calculating the 5% tax hit on billionaires, and ban any new taxes being imposed retroactively, another shot at a key provision of the billionaire measure. If 42 wins, 40 loses.
It wouldn’t be a statewide ballot battle without an entry from the Howard Jarvis Taxpayers Association. Its entry is Prop. 43, which would bar local governments from imposing new special taxes without winning a special election by a two-thirds majority. That super-majority voter approval would also be applied to citizen initiatives, which currently only require winning a simple majority to go into effect.
