The short version
- Proposition 40 proposes a one-time 5% tax on California billionaires to fund healthcare, education, and food assistance programs.
- Opposition groups have spent over $356 million, with daily spending exceeding $2.5 million in late October, making it potentially the most expensive ballot measure in history.
- Supporters argue the tax is a necessary response to federal healthcare cuts that could leave millions of Californians without coverage.
California voters are preparing to decide on Proposition 40, a contentious ballot measure that would impose a one-time 5% tax on billionaires residing in the state as of January 1, 2026. The initiative has emerged as one of the most fiercely contested political battles in recent state history, drawing national attention and pitting progressive Democrats against wealthy tech industry leaders. As the midterm election approaches, the measure has become a defining issue, with both sides deploying significant resources to influence the outcome.
The proposal was conceived by Dave Regan, president of the healthcare union SEIU-United Healthcare Workers West (SEIU-UHW), as a direct response to federal legislation that threatens state healthcare funding. Regan described the idea as a "bold and desperate answer" to the One Big Beautiful Bill Act signed by President Donald Trump. That federal law mandates trillion-dollar cuts to Medicaid, the Affordable Care Act, and other healthcare programs over the next decade to offset tax reductions. Proponents warn that when these cuts take effect in January, more than 3.4 million Californians, including millions of children, could lose their health insurance coverage.
According to supporters, the proceeds from the billionaire tax would be directed toward funding healthcare programs, as well as education and food assistance initiatives. Regan argued that inaction was not an option given the scale of the potential crisis. "To us, what’s crazy is doing nothing and watching millions of people lose coverage," he said. The union-led campaign has relied heavily on viral social media efforts, leveraging influencers and public figures such as artist Shepard Fairey and actor Mark Ruffalo to spread awareness among voters.
However, the measure faces intense opposition from California’s ultra-wealthy, who view the tax as an existential threat. Tech billionaires have poured upwards of $356 million into independent expenditure-only political action committees, commonly known as Super PACs, to defeat the proposal. This financial onslaught has transformed the race into what David McCuan, a political science professor at Sonoma State University, described as potentially the most expensive ballot measure in world history, not just California history.
The opposition campaign’s spending has accelerated dramatically in recent weeks. Campaign filings from the first two weeks of October reveal that opponents spent more than $42.8 million, averaging over $2.5 million per day. These funds have been used to hire an army of consultants, flood airwaves with advertisements, and place opinion pieces in Latino newspapers across the state. The strategy aims to counter the pro-tax narrative by highlighting concerns about the tax’s structure as a one-off measure that may not provide long-term stability for healthcare funding.
Despite the massive financial disparity, the race remains competitive, though recent polling indicates challenges for Proposition 40. A new poll released by CalMatters shows the billionaire tax falling behind as the election nears, suggesting that the opposition’s heavy spending and messaging are resonating with some voters. Critics, including some Democrats, have pointed out structural flaws in the proposal, noting that a one-time tax may not adequately address ongoing healthcare needs or fund programs sustainably.
The conflict has also exposed deep divisions within the Democratic party. Progressive politicians have found themselves aligned with tech billionaires in opposing certain aspects of the political landscape, while traditional union leaders push for wealth redistribution measures. The situation has been further complicated by leaked communications and internal disagreements, adding to the messy nature of the brawl over the last year.
As voters head to the polls, the outcome of Proposition 40 will signal broader trends in California politics regarding wealth taxation and social safety nets. If passed, it would represent a significant shift in how the state addresses healthcare funding disparities. If defeated, it may embolden wealthy donors to continue opposing similar measures in the future. The final days of the campaign are marked by high stakes and unprecedented financial engagement from both sides.
What remains unresolved is whether the sheer volume of opposition spending can overcome the moral urgency presented by supporters regarding healthcare access. While the pro-Prop 40 camp has mobilized grassroots support through digital channels, the opposition’s traditional media dominance poses a significant hurdle. The coming days will determine if California voters prioritize immediate relief for potential healthcare losses or adhere to concerns about tax policy structures.
Ultimately, Proposition 40 serves as a test case for how states might respond to federal budget cuts affecting social services. Regardless of the result, the battle has highlighted the growing influence of billionaire wealth in state politics and the increasing polarization around issues of economic inequality. The decision will have lasting implications for California’s approach to funding public goods in an era of fiscal uncertainty.
Sources behind this briefing
Go to the original reporting
- The Guardian US↗Billionaire tax: how a union leader’s ‘crazy’ idea became the defining issue of California’s midterms
- CalMatters↗New poll shows billionaire tax falling behind as election nears
