California's Proposition 40, a proposed one-time wealth tax on billionaires aimed at funding health care and educational facilities, is showing low passage probabilities on prediction markets just ahead of Election Day. Traders on platforms like Kalshi and Polymarket International are assigning low odds to the measure, suggesting it is unlikely to pass.
Across California's 14 statewide propositions, prediction markets indicate varying degrees of voter sentiment. These markets treat political outcomes as financial derivatives, operating under a different regulatory framework than sports betting.
Housing and Infrastructure
Proposition 1, which authorizes $11.25 billion in bonds for veteran and affordable housing programs, shows strong market support with passage probabilities of 75% on Kalshi and 89% on Polymarket. Similarly, Proposition 37, designed to create a state-backed loan program for middle-income homebuyers, has high implied passage rates of 91% on Kalshi and 82% on Polymarket.
State Finances and Elections
Proposition 2, concerning the state's rainy day fund, has strong market backing, with Kalshi at 92% and Polymarket at 72%. However, Propositions 4 and 5, which deal with public campaign financing and recall elections respectively, are both projected to fail, with passage odds below 30% on both platforms.
Taxes and Spending Rules
Proposition 3, which would make a temporary income tax increase permanent for public schools and health care, is heavily favored to pass, with both Kalshi and Polymarket showing odds above 94%. Proposition 42, prohibiting new state personal property taxes and retroactive tax legislation, also shows strong market confidence with passage rates around 80% on both platforms. Proposition 41, which restricts new state taxes outside specified spending limits and requires independent audits, is projected to pass with 54% on Kalshi and 59% on Polymarket. In contrast, Proposition 40, the billionaire tax, has a low implied passage rate of 25% on Kalshi and 23% on Polymarket.
Voting, Health Care, and the Environment
Proposition 39, requiring government-issued photo identification to vote, has low passage odds at 14% on Kalshi and 21% on Polymarket. Proposition 38, authorizing $8.4 billion in bonds for medical research facilities, is projected to pass with 82% on Kalshi and 72% on Polymarket. Proposition 44, which would direct community health clinics to allocate at least 90% of revenue to patient programs, is facing low passage odds at 8% on Kalshi and 11% on Polymarket. Proposition 45, concerning the CEQA review process for certain projects, shows a 32% passage probability on Kalshi and 37% on Polymarket.
The percentages on these prediction markets reflect the implied probability of passage based on trading activity and are subject to change. They do not represent official forecasts or guarantees of voter decisions.