Proposition 40 began the fall with a straightforward political pitch: impose a one-time 5% tax on the net worth of California residents worth more than $1 billion, and use the proceeds to help offset federal healthcare cuts. Backers, including progressives such as Bernie Sanders and Rep. Ro Khanna, say the measure could prevent Californians from losing Medi-Cal coverage.¹

But its early polling edge evaporated as the campaign intensified. In September, the Public Policy Institute of California found 52% support and 46% opposition; by October, those numbers had flipped, with 46% in favor and 52% against. Berkeley’s Institute of Governmental Studies also found the measure trailing, 42% to 50%, with 8% undecided.¹ A separate Politico poll showed a narrower 46%-43% lead for supporters, but that still left the proposal below the majority it needs.

Opponents — heavily financed by billionaires and business interests — have argued the tax could push wealthy residents out of the state and ultimately reduce revenue. Their camp has also won prominent Democratic support, including from Gov. Gavin Newsom, Xavier Becerra and former Rep. Katie Porter.¹

The battle has become more complicated than a simple yes-or-no vote. Propositions 41 and 42, submitted by the billionaire-backed Building a Better California committee, could nullify Prop. 40 if either receives more votes. Prop. 42 would permanently bar statewide taxes on personal property, including retirement and savings accounts; supporters call it protection against double taxation, while critics label it a “billionaire-funded trick.”²

That creates the measure’s final trap: even a majority for taxing billionaires may not be enough. As tax analyst Jared Walczak put it, both rival measures “could win majority support,” leaving Prop. 40 vulnerable to the very anxieties its opponents have cultivated.²