California voters decide on Proposition 40 taxing billionaires

California voters are deciding on Proposition 40, a measure to impose a one-time 5% tax on residents with a net worth of $1 billion, excluding real estate and some retirement assets, CBS News Los Angeles reported.

Supporters of the proposition say it could generate $100 billion over five years, with 90% of the funds allocated to healthcare programs and the remaining 10% to education, food assistance, and tax administration.

Proponents argue the tax is necessary to offset federal healthcare cuts enacted in 2025 and to protect hospitals, emergency rooms, clinics, and Medi-Cal services. They also contend billionaires benefit from unrealized stock market and business valuation gains without paying income tax on those gains.

The measure has divided traditional Democratic allies. The California Democratic Party and labor unions such as SEIU Healthcare Workers West support it, while Governor Gavin Newsom, former Representative Katie Porter, and major healthcare and professional groups oppose it, despite their general support for higher taxes on wealthy individuals.

The vote is seen as a test case for taxing extreme wealth and financing public services, with observers watching how California voters respond to the proposal amid broader national debates on economic inequality.