Should California voters approve Proposition 40? (November 3, 2026 ballot)

What's this about?

People disagree about whether California voters should approve Proposition 40 on November 3, 2026.

The plan would tax some very rich people once and send most money to health care.

What supporters say

• The plan could bring tens of billions of dollars for health care and other public needs.
• More health care money can help people get care and may help them stay healthier.
• A one-time tax may cause less harm than a tax charged every year.
• The plan could tax wealth that normal income taxes may miss, such as rising stock value.

What critics say

• Courts may block the plan or change how it works after voters approve it.
• No one knows for sure how much money the tax would raise.
• The state may need costly and complex systems to find wealth and collect the tax.
• Rich taxpayers may move money, sell assets, or leave California, cutting the money raised.

How to read this

The number of points on each side does not show who is right; strong proof matters more than a long list.

Proposition 40 would impose a one-time tax on some of California’s wealthiest residents and direct most of the money to health care. The decision turns on whether a potentially large but uncertain funding boost is worth the fiscal, administrative and legal risks.

The case for

The strongest argument for Proposition 40 is that it could raise tens of billions of dollars over several years for public needs. The Legislative Analyst and the measure’s official summary project a substantial one-time gain, with 90 percent of the proceeds going to specified health-care programs and the rest to education, food assistance and administration. Because the measure bars officials from using the new money to replace existing funding, it could add resources rather than simply shift money between programs. 1 (see Figure 1)

The tax also targets a gap in the current system. Billionaires can see much of their wealth grow through assets such as company shares, but that increase often is not taxed as income until the assets are sold. Research using administrative data finds that the effective tax rate paid by U.S. billionaires can look relatively low when measured against their total economic income. That supports the argument that a wealth-based tax could reach money ordinary income taxes often miss. 2

The proposed spending offers a plausible public benefit. Research on Medicaid and other public insurance generally links expanded coverage to better access to care and some improved health outcomes. But that research does not show that Proposition 40 itself would produce benefits of the same size or quality. 3

Supporters may also point to the measure’s one-time design. Unlike an annual wealth tax, it would not repeatedly impose the same liability. Taxpayers could spread payment over several years, potentially limiting long-term incentives to move assets or leave California. Those incentives would not disappear, however, because the initial bill could still influence behavior. 4

The case against

The most serious concern is that taxpayer responses could shrink both the immediate proceeds and future state revenue. The Legislative Analyst warns that California might lose less than $1 billion a year in income-tax collections on an ongoing basis. A study of a Norwegian wealth-tax change found migration to be a major response, though Norway’s tax system differs from California’s and the study involved a recurring tax rather than a one-time levy. 5

Revenue forecasts are unusually difficult. Asset values can rise and fall, while taxpayers may change how they own, value or report property. The tax would cover hard-to-value assets including private companies, intellectual property, art and collectibles. As a result, the state could collect less—or collect it later—than expected, making it difficult to plan health-care spending around the money. 6

Administration would also be costly and complicated. The Legislative Analyst projects administrative expenses of tens of millions of dollars annually for several years. Enforcement would require extensive reporting and valuation, and international evidence of hidden offshore wealth suggests that collection would depend heavily on the state’s ability to detect and pursue avoidance. 7

Finally, the measure’s legal future is uncertain. Legal scholars disagree over whether wealth taxes are “direct taxes” subject to constitutional limits. Proposition 40 includes state constitutional language intended to address some issues, but lawsuits could still delay collections, increase costs or change how the tax operates. 8