Proposition 40: Imposes One-Time Tax on Certain Taxpayers. Initiative Constitutional Amendment and Statute.

The law today

Billionaires, like all who earn money in California, currently pay state tax on their annual income; wealth (net worth, the value of what a person owns minus debts) is distinct from income. The Legislative Analyst notes California is home to a few hundred people with net worth over $1 billion. State and federal governments spend over $200 billion per year on state health care programs, most of it for Medi-Cal.[2]

Official fiscal estimate

Per the Legislative Analyst: the state "probably would collect tens of billions of dollars" over several years, though timing and amount are very hard to predict; a possible ongoing loss of less than $1 billion per year in income tax revenue if billionaires reduce income taxes paid or leave; administration costs of tens of millions of dollars per year for several years, paid from the tax revenue.[2]

Arguments made for

• Official argument in favor, signed by Suzanne Jimenez (SEIU-United Healthcare Workers West), Victoria Barron (Planned Parenthood of Pacific Southwest) and Denise Robb, Ph.D. (American Federation of Teachers Local 1521): "Prop. 40 makes approximately 200 California billionaires pay a modest, one-time tax on their global wealth to keep local hospitals and ERs open and healthcare affordable for millions of Californians."[3]
• Same argument: "It will raise about $100 billion to replace the funding Trump and his billionaire donors took from working people." (The Legislative Analyst estimates "tens of billions of dollars" over several years.)[2][3]

Arguments made against

• Official argument against, signed by René Bravo, M.D. (California Medical Association), Francisco Silva (California Primary Care Association) and Dr. Debra Schade (California School Boards Association): "A study by Stanford University economists found the tax will cost California $25 billion as the tax drives companies and wealthy residents out-of-state."[3]
• Same argument: Prop. 40 "exempts itself from voter-approved constitutional protections for schools, shortchanging classrooms over $3 billion annually" and "includes no safeguards to prevent billions from going directly to health insurance companies and CEOs."[3]

On record in support

• SEIU-United Healthcare Workers West (signer of the official argument in favor; sponsor of the Yes campaign committee)[3][5]
• Planned Parenthood of Pacific Southwest, signed by Victoria Barron (official argument in favor)[3]
• American Federation of Teachers Local 1521, represented by Denise Robb, a member who signed the official argument in favor[3]
• California Nurses Association (listed as a supporter in the official rebuttal to the argument against)[3]
• Rep. Ro Khanna (listed as a supporter in the official rebuttal to the argument against)[3]
• California LULAC (listed as a supporter in the official rebuttal to the argument against)[3]

On record in opposition

• Gov. Gavin Newsom (named as an opponent in the official argument against)[3]
• California Teachers Association (named as an opponent in the official argument against)[3]
• California Chamber of Commerce (named as an opponent in the official argument against)[3]
• California Taxpayers Association (named as an opponent in the official argument against)[3]
• State Building and Construction Trades Council of California (named as an opponent in the official argument against)[3]
• California Medical Association, California Primary Care Association and California School Boards Association (signers of the official argument against)[3]