California voters face one-time 5% tax on billionaires to fund healthcare
Proposition 40 targets the wealth of roughly 250 residents to restore cuts made by federal legislation, a move supported by unions but opposed by Governor Newsom.
By Hassan Bello ·
California voters face a choice on Tuesday regarding a one-time tax on the accumulated wealth of the state’s richest residents. Proposition 40 proposes a 5% levy on individuals with net worth exceeding $1 billion. The measure applies to legal residents as of January 1, 2026. Approximately 250 people qualify for this tax under the proposed rules.
Supporters argue the tax will generate $100 billion to address healthcare funding gaps caused by the One Big Beautiful Bill Act. Ninety percent of the revenue would go to restoring healthcare services. The remaining 10 percent would support food assistance and public education. Dave Regan, President of SEIU United Healthcare Workers Trust, called the levy an emergency measure to prevent millions from losing coverage.
Regan stated that without action, 3.5 million Californians could lose their healthcare coverage. He noted that 20 million residents would face higher premiums. Some hospitals and clinics might close if the cuts remain in place. Regan criticized state leaders for not offering alternative solutions to the crisis.
Opponents include Governor Gavin Newsom and gubernatorial candidate Xavier Becerra. Newsom has advocated for a federal wealth tax but opposes Proposition 40. He argues the state tax could drive wealthy residents and businesses out of California. This would reduce the state’s competitive edge and shrink its tax base.
Stuart Waldman, an advocate for Los Angeles’ business community, warned of the economic risks. He noted that 38 percent of the state budget comes from the top 1 percent of earners. Waldman said that if those individuals relocate, the impact would be drastic for healthcare, teachers, and education. Critics also point out that the proposal allocates 90 percent of funds to one category. They argue it ignores public safety, housing, and wildfire prevention.
The union spearheading the effort believes the tax makes wealthy residents participants in society. Regan emphasized that the measure aims to ensure millions do not lose healthcare access. The result will determine if California becomes the first state to enact a billionaire tax.
Source: ABC7 Los Angeles
