What to know about Prop 40

Proposition 40, California’s billionaire tax proposal, would authorize a one-time, 5% “wealth tax” on residents of the state with a net worth above $1 billion. The Nov. 3 Election Day ballot measure has divided politicians, the wealthy, economists, public policy groups, and voters, and it is looking more likely that the vote is headed down to the wire.

The initiative is a major test of the appetite for state-level taxation of extreme wealth — its result, economists say, could shape how other states approach wealth tax policy going forward.

What the latest polls show

In a University of California Berkeley Institute of Governmental Studies poll conducted in September, 45% of likely voters said they would vote “Yes” on Proposition 40, while 42% said they would vote “No.” 

The results continued a recent shift in the pollster’s data, with the “Yes” edge shrinking from 7% to 3%. In its early August survey, UC Berkeley IGS found 48% of likely voters said they would vote yes. In its polling last March, “Yes” on Prop 40 had a 19% margin, with 52% of those polled expressing support and only 33% expressing opposition. According to its September poll, 13% of voters remain undecided.

A more recent poll conducted by Mason-Dixon Polling & Research for NBC Universal and Telemundo found “Yes” still has a sizable 10% advantage.

Large partisan differences characterize support and opposition to Proposition 40, with Democrats supporting it by more than three to one, while Republicans are opposed nearly eight to one. The views
of non-partisan voters are similar to those of the overall electorate.

While “Yes” continues to have an edge in the polls, prediction markets see Prop 40 going down to defeat by a wide margin. Both Kalshi and Polymarket have the odds of passage currently at under 30%. These markets are not structured with methodologies used by traditional political polling.

How much money the measure could raise

The vast majority of the tax revenue would be used on state-funded healthcare programs, which will help offset healthcare cuts stemming from the One Big Beautiful Bill Act signed into law by President Trump last year, and which is estimated by the state’s nonpartisan Legislative Analyst’s Office to cost California “as much as tens of billions of dollars” though it says the impact on general funding will ultimately be determined by discretionary healthcare policy choices made by the legislature. 

There are an estimated 200-250 billionaires residing in California, based on tracking of Forbes data and other sources.

Alan Auerbach, economics professor at Berkeley, said the concentration of wealth among a very small number of Californians is a key sticking point of the proposal. On the estimates of around 200 individuals, he said, “Even among this number, wealth is…