California's proposed wealth tax on billionaires is facing a tightening race just weeks before voters decide on Proposition 40, a measure that would impose a one-time 5% levy on the fortunes of the state's wealthiest residents. A recent UC Berkeley Institute of Governmental Studies poll, co-sponsored by the Los Angeles Times, found that 45% of likely voters support the proposition, while 42% oppose it, with 13% remaining undecided.
This marks a decrease in support from six weeks prior, when the same poll indicated 48% in favor and 41% against the measure. The shift comes amidst a significant advertising campaign surrounding the proposition, which is one of the most closely watched on California's November ballot.
Proposition 40 aims to generate revenue for healthcare programs, with additional funds designated for education and food assistance. It targets billionaires who were California residents as of January 1, 2026, by taxing their net worth.
However, the tax has encountered strong opposition, prompting opponents to invest heavily in the campaign against it. Mark DiCamillo, director of the Berkeley IGS poll, noted that while voters express concern about economic inequality, they are also cautious about an unprecedented tax on assets rather than income. He suggested that voters are approaching the proposal with a degree of risk assessment.
Concerns about the potential impact on businesses and wealth migration have also been voiced. Eric Schiffer, chairman of Patriarch and CEO of Reputation Management Consultants, warned that the measure could lead to entrepreneurs leaving California, citing the possibility of a "giant sucking sound" of business departures if the tax is enacted. He questioned the incentive for wealthy individuals to remain in the state if their accumulated wealth, already subject to taxation, faces new levies.
The outcome of Proposition 40 could also be influenced by two other ballot measures.
Proposition 42, which seeks to limit taxes on certain personal property and restrict retroactive taxation, currently has 43% support, 34% opposition, and 23% undecided. Proposition 41, with 37% support and 33% opposition, also has a significant undecided voter base at 30%.
In contrast, Proposition 3, which would make permanent an existing income tax increase on high earners that funds schools and healthcare, appears to be on more stable ground. This measure, originally approved in 2012 and set to expire in 2031, applies to individuals earning at least $360,000 annually. The differing levels of support for Proposition 3 and Proposition 40 highlight a potential voter distinction between extending existing income taxes and introducing a new wealth tax.
The wealth tax has drawn national attention and substantial political spending, revealing divisions within the California Democratic Party. While the party endorses Proposition 40, Governor Gavin Newsom opposes it, citing concerns about its long-term effects on the state's finances. The proposition's fate now rests significantly on the undecided voters as the election approaches.