U.S. Rep. Ro Khanna has backed a one-time 5% tax on California billionaires, adding his support ahead of a Nov. 3 vote that could direct billions of dollars toward public services.
Proposition 40 would apply to billionaires who lived in California on Jan. 1, 2026. The proposed law sets Dec. 31, 2026, as the date for valuing their wealth, separate from the residency cutoff.
California's official ballot analysis says 90% of the proceeds would go to public health care. The remainder would fund education, food assistance and tax administration.
The California Legislative Analyst's Office estimates the tax could raise tens of billions of dollars over several years, though the total is uncertain. It also estimates that changes in billionaires' behavior could reduce annual state income tax revenue by less than $1 billion.
Khanna made his case in an Oct. 19 opinion column in The Guardian. He argued that income tax does not capture increases in asset values while owners continue to hold those assets, and framed the vote as a choice about whose interests the Democratic Party serves. He cited Wisconsin's 1911 income tax as a precedent for revisiting tax policy.
Gov. Gavin Newsom opposes Proposition 40, CalMatters reported. In an Oct. 9 statement, the Yes on 42 campaign said Newsom had endorsed Proposition 42. The official voter guide says that measure would prohibit new state taxes on personal property and restrict certain retroactive state taxes.
Building a Better California is also opposing Proposition 40. The group describes itself as a nonprofit with a separate political action committee; its campaign is detailed in earlier coverage of opposition fundraising.
Voters will decide both propositions Nov. 3. The wealth tax could still be blocked after winning a majority if Proposition 42 receives more yes votes and a court rules that the measures conflict.
