California voters are deciding Proposition 40, a one-time 5% tax on the accumulated wealth of taxpayers worth more than $1 billion. Supporters say the measure would hit about 250 people and bring in $100 billion to shore up the state’s healthcare system.
The proposal would apply to anyone who was a legal resident of California as of Jan. 1, 2026, if it passes. Supporters say 90% of the money would go to restoring healthcare cuts, while the other 10% would be split between food assistance and public education.
Dave Regan, a supporter of the measure, said the tax is a one-time emergency step meant to keep millions of people from losing healthcare. He said that if nothing is done, 3.5 million Californians could lose coverage, 20 million people could face higher premiums and some hospitals and clinics could close. He cast the tax as a small demand on people who have already been made “incredibly wealthy” by the state’s economy.
The fight over Proposition 40 comes as supporters link the measure to severe healthcare cuts they say could follow the One Big Beautiful Bill Act. Their case is simple: raise money quickly, protect coverage and keep the system from buckling. The math they point to is stark, with the tax aimed at a very small group of ultra-wealthy Californians and the benefits spread across millions of patients.
But the opposition has made a different argument. Gavin Newsom and Xavier Becerra are both against the measure, and Newsom has said California should pursue a federal wealth tax instead. He has also warned that Proposition 40 could weaken the state’s competitive edge and push wealthy residents and businesses out of California.
Stuart Waldman has argued that California already leans too heavily on its highest earners, saying 38% of the state budget comes from the top 1%. He said the budget would take a hit if those people moved, and critics also object that 90% of the money would be steered into one category rather than public safety, housing or wildfire prevention. Some opponents go further, saying the measure could open the door to broader tax increases later.
That leaves Proposition 40 as more than a simple yes-or-no vote on taxing billionaires. It is a test of whether California wants to use a one-time wealth tax to defend healthcare now, even at the risk, as opponents warn, of driving out the people who pay a large share of the state’s bills. The result will decide which fear carries more weight with voters: losing coverage or losing taxpayers.
