Imposes One-Time Tax on Certain Taxpayers. Initiative Constitutional Amendment and Statute.

Proposition 40 requires billionaires who were California residents on January 1, 2026 to pay a one-time state tax equal to 5 percent of their net worth, due in 2027.

Proposition 40 lets taxpayers spread their wealth tax payments over five years, but they would have to pay more to do so.

Proposition 40 generally excludes real estate, pensions, and retirement accounts from the wealth tax.

Proposition 40 requires 90 percent of the wealth tax money to be spent on health care services for the public. The state would decide how and when to spend it.

Proposition 40 requires the rest of the wealth tax money to be spent on education, food assistance, and administering the wealth tax.

Proposition 40 exempts the wealth tax money from State Constitution rules that limit state spending and that require the state to spend a certain amount on schools and community colleges.

The Legislative Analyst estimated that the state probably would collect tens of billions of dollars from the Proposition 40 wealth tax, spread across several years, but that exactly when and how much is very hard to predict.

The Legislative Analyst estimated that billionaires' responses to Proposition 40, such as leaving California, probably would reduce state income tax revenues by less than $1 billion per year.

The Legislative Analyst estimated that the state's costs to administer the Proposition 40 wealth tax could be tens of millions of dollars per year for several years, paid from the new wealth tax revenues.

"Prop. 40 makes approximately 200 California billionaires pay a modest, one-time tax on their global wealth to keep local hospitals and ERs open and healthcare affordable for millions of Californians."

"It will raise about $100 billion to replace the funding Trump and his billionaire donors took from working people to line their pockets."

"The funds will go to life-saving medical care for seniors, veterans, and families."

"It will allow millions of Californians to keep their health insurance and not see their premiums skyrocket."

"It will prevent mass teacher layoffs in our public schools..."

"It will...keep children fed through food assistance programs."

"You pay your taxes out of every paycheck, but billionaires pay much lower rates than working families."

"Prop. 40 enacts a one-time tax paid ONLY by Californians worth more than $1 billion, a small group of people who together hold $2 trillion in wealth..."

"Prop. 40 is a BILLIONAIRE tax. It cannot be applied to anyone else—working people already pay more than their fair share."

"Prop. 40 won't fix healthcare or lower costs for consumers..."

"...it's a blank check that ALLOWS THE LEGISLATURE TO GIVE BILLIONS TO HEALTH INSURANCE COMPANIES, with no guarantees struggling families see a single cent to help them with high healthcare costs."

"A study by Stanford University economists found the tax will cost California $25 billion as the tax drives companies and wealthy residents out-of-state."

"The special interests behind the measure wrote it to give the State Legislature power to amend the measure—without voter approval."

"Independent legal analysis found Prop. 40 opens the door to expanding the tax to the assets of ALL Californians—to your savings, home equity and even retirement funds."

"Prop. 40 would be the first in California history to tax retirement accounts—a dangerous precedent."

"Prop. 40 won't help schools: it exempts itself from California's voter-approved protections for school funding. That SHORTCHANGES PUBLIC SCHOOLS $3 BILLION ANNUALLY."

"...Prop. 40 includes no accountability, transparency or oversight provisions to ensure funds are spent as intended."