California voters to decide Proposition 40: first-of-its-kind tax on billionaires

California voters will decide on November 3 whether to impose what the BBC describes as the world's first direct tax on billionaire wealth. Proposition 40 proposes a one-time 5% levy on the net worth of the state's more than 200 billionaires, applying retroactively to anyone who lived in California on January 1, 2026, with the tax due in 2028.

The measure needs a simple majority to pass. Supporters say it could raise an estimated $100 billion to backfill federal healthcare cuts under President Donald Trump's domestic policy bill, which have strained California's budget. The ballot text notes that California could cover health services for some of its most vulnerable residents even when its wealthiest are asked to make what it calls a small contribution.

Backers include Nvidia CEO Jensen Huang, investor Tom Steyer, Senator Bernie Sanders and the Service Employees International Union, which gathered signatures to put it on the ballot; the campaign says it has more than 25,000 donors averaging $100,000 each. Opponents have spent over $120 million fighting it, led by Governor Gavin Newsom, who has warned the measure could trigger an economic 'death spiral,' and Google co-founder Sergey Brin, who has given more than $100 million to a nonprofit opposing ballot measures, according to the Los Angeles Times.

The outcome is being closely watched by Democrats as a possible model for the party's economic message ahead of the 2028 presidential election, the BBC reports. A UC Berkeley poll found 45% of likely voters in favor, 42% opposed and 13% undecided.