What changed
California voters are preparing to decide on Proposition 40, a one-time tax of 5% on the net worth of the state’s billionaires. The measure targets a little more than 200 people and aims to raise $100bn for healthcare after federal funding cuts.
Why it matters
This is a direct test of whether extreme wealth can become a large, one-off source of public funding. Supporters say billionaires should help fill the gap and describe the tax as a short-term response to possible healthcare cuts. The measure’s backers include the Service Employees International Union-United Healthcare Workers West, while Nvidia chief Jensen Huang is among the billionaires supporting it.
The political fight is unusually sharp. Governor Gavin Newsom opposes the proposal, warning that wealthy residents could leave California and take future income-tax revenue with them. Google co-founder Sergey Brin has given more than $100m to a political organisation funding measures that could block the tax.
The money is also the central uncertainty. The proposal could raise $100bn, but it is not yet clear whether voters will approve it, whether targeted billionaires would leave or restructure their assets, or whether collections would reach that scale.
A September poll found 45% of likely voters supported Proposition 40, 42% opposed it and 13% were undecided. Approval requires a majority vote. If it passes, California would create what UC Berkeley public policy professor Francesco Trebbi described as the first wealth tax aimed specifically at the very richest part of the population.
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