Proposition 40 seeks to impose a one-time 5% tax on the state’s estimated 200 to 240 billionaires next year, with 90% of revenues directed towards making up for the Medicaid cuts enacted in Donald Trump’s 2025-26 federal budget.
By Steve Wishnia
With a ballot initiative to levy a one-time 5% tax on billionaires’ wealth apparently headed for defeat, the California unions who sponsored it say they’re going to try again.
The measure, Proposition 40, would have imposed the tax on the state’s estimated 200 to 240 billionaires next year, with 90% of revenues directed towards making up for the Medicaid cuts enacted in Donald Trump’s 2025-26 federal budget. As of 9 p.m. on Nov. 4, with 61% of the ballots counted, it had received 44.7% of the vote and was trailing by 850,000 votes.
“The votes are still being counted, but a tiny group of the most controversial and wealthiest billionaires on the planet have poured nearly $500 million into a deeply misleading and corrupt campaign to protect their fortunes, even as children, families, veterans, and seniors face losing access to life-saving health care and emergency rooms,” SEIU-United Healthcare Workers West chief of staff Suzanne Jimenez told Work-Bites Nov. 4. “Yesterday, voters across America delivered a stinging rebuke to Donald Trump and his agenda. We believe billionaires will face a similar political reckoning in elections to come, particularly as Californians begin to experience the devastating consequences of the health-care cuts these billionaires have refused to help prevent.”
SEIU-United Healthcare Workers West President Dave Regan, speaking at an online press conference just before the polls closed in California Nov. 3, estimated that the tax would raise $100 billion, enough to “backfill” the cost of covering care for the 1.8 million Californians cut off by the Trump budget.
Meanwhile, a coalition of more than 20 billionaires poured at least $379 million into sinking Prop 40. According to figures from TransparencyUSA, Google cofounder Sergey Brin put in $102 million, while the company’s former CEO, Eric Schmidt, gave $40.2 million. Campaign. Silicon Valley venture capitalist L. John Doerr threw in another $40 million, and Stripe CEO Patrick Collison gave $17.5 million.
According to the Washington Post, the billionaire coalition spent more than 70 times as much on ads as Prop 40 supporters did. One ad depicted Prop 40 as a Trojan horse that would “enable politicians to tax your savings, your retirement, even your home equity.” Another, generated by AI and credited to “Californians Against Wasteful Spending and Higher Taxes,” featured a Bernie Sanders lookalike pulling a Trojan piggy bank that breaks open to unleash club-swinging bureaucrats who knock little boys off bicycles and steal old women’s TVs. It claimed that the measure would require everyone to register their assets with the state for potential confiscation.
The ad flood, which peaked in October, seems to have eroded support for Prop 40. It was polling at 52% in September. But in the returns in as of Nov. 4, Prop 40 was only ahead in nine of the state’s 58 counties. Its best showing was 55% in Santa Cruz County, and it had 54% in the East Bay, 53% in San Francisco, and 51% in Los Angeles. But it won only 44-45% in Silicon Valley, 43% in San Diego, 39% in L.A.’s Orange County suburbs, and less than 25% in the rural pro-Trump northeast.
That pattern was similar to the unsuccessful 2018 initiative to repeal the state’s strict limits on local rent-control laws. With landlord trade groups and private-equity firms outspending supporters by more than 3 to 1, the measure received only 39% of the vote. It did best in areas with large proportions of renters, carrying the San Francisco Bay Area and coming close in the Los Angeles area, but lost badly in the rest of the state. The landlord lobby’s ads claimed the initiative had no protections for the elderly and disabled—a claim the head of the San Francisco Tenant Union called “really outrageous,” as the state law that kept apartments deregulated had no such protections either.
The billionaire coalition also got two initiatives on the ballot intended to undermine Prop 40. Prop 42, which would prevent a wealth tax by prohibiting any new state tax on personal property, had 54% as of Nov. 4, a 635,000-vote lead.
If passed, Prop 42 “could potentially affect the way in which future efforts to ensure billionaires pay a fair share are approached,” Jimenez told Work-Bites, “but it will not stem the tide of Californians demanding accessible health care and accountability from billionaires who have taken that away.”
This is about protecting health care, SEIU-UHW member Mayra Castañeda told the election-night press conference. Unless money is found in time, people are going to die from going without care once the Medicaid cuts go into full effect in January, she said, and hospitals, nursing homes, and home-care agencies might close as a result of the cuts too.
Whether Prop 40 wins or loses, California Federation of Labor Unions President Lorena Gonzalez said, the state will still lack enough money for health care, and still have an obscene concentration of wealth that threatens democracy.
In organizing, you learn that “few things come quickly,” she added. “If the billionaires win this battle, I guarantee they will not win the war.”
This was the first ballot initiative to try to tax billionaires to finance health care, Regansaid.
“If Sacramento fails to deliver a real solution to the health-care crisis,” he continued, “California health-care workers intend to be back on the ballot in 2028.”