California voters prepare to decide on one-time billionaire tax

Summarised from 2 outlets · 3 reports · Updated 31 Oct, 11:30 · Archive

California voters will decide on Proposition 40, a proposed one-time 5% tax on billionaires to fund healthcare programmes. The tax would apply to billionaires living in the state as of 1 January 2026, with proceeds funding healthcare, education and food assistance. Prediction-market traders on platforms including Kalshi and Polymarket are betting the measure will fail to pass.

The measure originated as a response to anticipated federal healthcare cuts. Dave Regan, president of the healthcare union SEIU-United Healthcare Workers West, proposed the tax after President Donald Trump signed legislation dictating over a trillion dollars in cuts to Medicaid, the Affordable Care Act and other healthcare funding over the next decade. When that bill takes effect in January, over 3.4 million Californians could lose coverage, including millions of children, according to reporting cited by The Guardian.

The proposal has created an unusual split within California's Democratic Party. A high-quality poll conducted mid-summer found Democrats supported the measure by a ratio of more than four to one. However, the state's most powerful Democrats – including Governor Gavin Newsom, his near-certain successor Xavier Becerra and Los Angeles Mayor Karen Bass – have opposed it, aligning with billionaires in Silicon Valley who have raised upward of $340 million to defeat the initiative.

Other prominent Democratic leaders have remained silent on the measure. California's senators Alex Padilla and Adam Schiff, former vice-president Kamala Harris and former House speaker Nancy Pelosi have not publicly stated positions on Proposition 40. According to The Guardian, their silence is described as giving cover to billionaires fighting the measure.

Nine-tenths of the tax revenue would go to healthcare for low-income Californians. The Guardian reported this month that California stands to lose around $100 billion in federal Medicaid funding over the next five years, threatening coverage for millions and potentially causing hospital closures.

Regan defended the proposal's ambition. 'To us, what's crazy is doing nothing and watching millions of people lose coverage,' he said, according to The Guardian. The initiative has faced criticism from some Democrats who question its structure as a one-off tax funding only certain healthcare programmes.

How it is being reported

• Top Democrats are fighting a billionaire tax in California. Their voters are on the other side |The unprecedented measure has enormous potential nationwide. The clash exposes the party’s corporate-progressive divide Midway through this summer, a high-quality poll found that Democrats in California were overwhelmingly in favor of the upcoming ballot measure for a one-time 5% tax on billionaire wealth. The ratio was more than 4 to 1. But the state’s most powerful Democrats – including the governor Gavin Newsom, his near-certain successor Xavier Becerra and the Los Angeles mayor Karen Bass – have lined up with Silicon Valley billionaires who’ve raised upward of $340m to defeat the…The Guardian · 31 Oct, 11:00
• Billionaire tax: how a union leader’s ‘crazy’ idea became the defining issue of California’s midtermsIt was an ambitious notion – now Californians will vote on a one-time 5% billionaire tax, and state’s super rich have pulled out all the stops in opposition One year ago, the idea of a billionaire tax in California was still in its infancy. It wasn’t yet one of the most contentious ballot measure fights in state history – pitting Democrats against Democrats, drawing national attention from political heavyweights, and netting hundreds of millions of Silicon Valley dollars to fight it. Back then, it was a bold and desperate answer to Donald Trump’s healthcare cuts. Continue reading...Guardian Business · 30 Oct, 15:00
• California’s billionaire tax gets a brutal reality check ahead of Election Day – here’s what traders expect to passVoters are preparing to decide 14 statewide propositions next week.New York Post · 29 Oct, 12:00

In this story: California · Dave Regan · Gavin Newsom · Xavier Becerra · Karen Bass · SEIU-United Healthcare Workers West · Silicon Valley

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