California Billionaire Tax Wins Majority Support — But Rival Ballot Measures Could Kill It

California Gov. Gavin Newsom is facing another political headache after state Democrats defied his opposition and endorsed a sweeping billionaire wealth tax that narrowly leads in a new voter survey.

The clash comes during a difficult stretch for the Democratic governor. Newsom recently responded after a woman publicly discussed an extramarital affair she had with him nearly two decades ago. He and his wife, First Partner Jennifer Siebel Newsom, are also confronting renewed scrutiny over his extensive use of “behested payments” as federal investigations continue attracting attention.

Now, Newsom finds himself opposing members of his own party over Proposition 40—a one-time tax targeting Californians with more than $1 billion in assets.

According to a new Public Policy Institute of California survey, 52% of likely voters support the measure, while 46% oppose it. Another 2% remain undecided, giving the proposal only a narrow advantage with less than two months remaining before the November election.

Proposition 40 would impose a one-time tax of up to 5% on qualifying billionaires. Supporters estimate that approximately 200 California residents could be subject to the levy based on their wealth and residency.

The proposal would apply to assets including businesses, stocks and other securities, artwork, collectibles and intellectual property. Real estate and certain retirement accounts would be excluded.

Under the measure, 90% of the revenue would be allocated to healthcare, with the remaining 10% directed toward food assistance or education-related programs.

California’s Legislative Analyst estimates the tax could produce tens of billions of dollars over several years. Supporters have promoted projections approaching $100 billion, claiming the money would compensate for federal reductions affecting healthcare and food-assistance programs.

The proposal is backed by SEIU United Healthcare Workers West and socialist Sen. Bernie Sanders. However, several prominent California Democrats have joined Republicans and taxpayer advocates in opposing it.

Organizations listed against the measure include the California Taxpayers Association, California Primary Care Association and California School Boards Association.

Newsom and Democratic gubernatorial nominee Xavier Becerra oppose Proposition 40 despite its endorsement by the California Democratic Party. Republican gubernatorial nominee Steve Hilton also rejects the proposal, producing an unusual coalition against the wealth tax.

But opposition from high-profile political figures may not be Proposition 40’s greatest obstacle.

Two competing ballot initiatives—Propositions 41 and 42—could effectively prevent the billionaire tax from taking effect even if voters approve it.

The same PPIC survey found 51% support for Proposition 41 and 54% for Proposition 42, placing both rival measures within the same general range of voter support as Proposition 40.

Under California law, conflicting ballot initiatives may both pass. However, when their provisions cannot be reconciled, the measure receiving the greater number of affirmative votes generally takes precedence.

Proposition 41 would require audits of programs financed through new special taxes and limit the ability of lawmakers to exempt that spending from California’s constitutional spending cap.

The measure also declares conflicting initiatives void if Proposition 41 receives more affirmative votes than another proposal appearing on the same ballot.

Proposition 42 would prohibit new state taxes on personal property, including financial assets, intellectual property and business interests—the precise categories Proposition 40 seeks to tax.

It would also block certain retroactive state taxes enacted or taking effect after January 1, 2026. Like Proposition 41, it includes language nullifying conflicting initiatives if it receives more affirmative votes.

Consequently, Californians could vote to approve the billionaire tax while simultaneously empowering another measure to stop it from being implemented.

Some of Silicon Valley’s wealthiest figures are spending heavily on the fight. Google co-founder Sergey Brin has reportedly contributed more than $100 million across initiatives that include efforts to defeat Proposition 40. Other affluent technology executives have financed committees opposing the tax or supporting measures that could neutralize it.

Critics warn that taxing wealth instead of income could drive billionaires—and the businesses, investments and tax revenue connected to them—out of California. That would deepen longstanding concerns about the state’s hostile business climate and dependence on a relatively small group of high-income taxpayers.

The Legislative Analyst estimates that billionaire departures could reduce California’s recurring income-tax revenue by less than $1 billion annually. But that projection remains uncertain because officials cannot predict how many affected residents would relocate or alter their investments.

Supporters dismiss warnings of a large-scale exodus and argue the tax is necessary to preserve healthcare programs amid reductions in federal funding.

Proposition 40 would also exempt its revenue from certain school-funding, reserve and spending-limit rules. Those carveouts place it in direct conflict with Proposition 41 and raise further questions about fiscal accountability.

The partisan divide remains substantial. Seven in ten Democrats support Proposition 40, while approximately three-quarters of Republicans oppose it. A narrow majority of independent voters also stands against the proposal.

Even if the wealth tax survives the competing ballot measures, state officials would confront significant enforcement problems. Privately held businesses, artwork, intellectual property and other assets without readily available market prices would be difficult—and potentially contentious—to value.

California voters will decide all three propositions on November 3. The billionaire tax’s fate will therefore depend not only on whether Proposition 40 passes, but also on how many votes each competing initiative receives.