40 Reasons to Vote No on Prop. 40

SACRAMENTO – With numbers now assigned to the initiatives appearing on California’s November General Election ballot, the campaign against the reckless wealth tax experiment today released a list of 40 reasons to vote NO on Prop. 40.

1. An unprecedented coalition of California leaders is standing against this measure. A growing coalition of healthcare, education, public safety, labor, business, and housing leaders oppose this measure. As the New York Times reported: “The common thread among the diverging interests is fear that a one-time tax would hurt the state’s long-term finances.”

2. It carves out nearly all funding for the benefit of just one interest group. California has enormous education, infrastructure, public safety, housing, and other needs, yet this measure earmarks 90% of funds for just one purpose — healthcare services. There is nothing for housing, nothing for childcare, nothing for public safety, nothing for universities, nothing for the environment, nothing for roads, and nothing for so many other top priorities for Californians.

3. Healthcare groups and providers, who proponents say will benefit most, are strongly opposed. The California Medical Association, California Primary Care Association, Planned Parenthood Affiliates of California, California Hospital Association, California Children’s Hospital Association, and others are all saying no to this measure. 

4. It will tear a hole in California’s safety net and shortchange patients. Healthcare leaders, safety-net clinics and reproductive healthcare providers have made it clear that this tax “will decimate the very safety-net and workforce that Medi-Cal patients rely on,” “relies on an unstable revenue source,” and “will do more harm than good.” 

5. It was drafted without meaningful input from California leaders. As the California Medical Association put it: “Healthcare stakeholders were not involved in developing the proposal. If the goal of this initiative were genuinely to solve Medi-Cal funding challenges, California’s physicians, providers, hospitals, clinics, and other healthcare stakeholders would have been included in developing the proposal.”

6. It bypasses school funding requirements. This tax exempts itself from Proposition 98, bypassing longstanding voter-approved constitutional protections for school funding — shortchanging classrooms and students billions of dollars every year. As the Legislative Analyst’s office explains: “Other state laws that require some tax revenue to be used in certain ways, like spending on schools and building the state’s rainy day savings, would not apply to this money.”

7. Top education leaders oppose it. Education groups across the state are rejecting this measure, including the California Teachers Association and California School Boards Association, noting that it “will not provide the sustainable and long-lasting funding that our schools and communities deserve.”

8. It will not collect the revenue promised. According to Stanford University research: “the one-time levy would collect approximately $40 billion in wealth tax revenue, less than half of the roughly $100 billion projected by proponents.”

9. Wealthy Californians — the foundation of the state’s tax base — are fleeing. At least six billionaires departed California before January 1, 2026 to avoid the new tax.

10. Damage is already being done to California’s economy. The departure of these individuals alone is estimated to remove $536 billion, or nearly 30% of aggregate billionaire wealth, from the tax base.

11. It could blow a massive hole in the state budget in years to come. Non-partisan analysis from fiscal and policy experts with the Legislative Analyst’s Office finds a “likely ongoing decrease in state income tax revenues” to the tune of “hundreds of millions of dollars or more per year.” They note: “This would mean less money for the state’s general budget that supports education, healthcare, prisons, and other services.” 

12. Other experts estimate it will end up costing the state nearly $25 billion in lost tax revenue. Stanford University research finds: “California’s proposed one-time wealth tax on billionaires would leave the state worse off by an estimated $25 billion once lost income tax revenue is considered.” Other studies suggest the economic and budgetary impacts could be even broader.

13. It creates a fiscal cliff that exacerbates the state’s budget challenges, leading to more taxes or cuts. A one-time wealth tax is not a durable solution and will not address California’s long-term budget challenges, especially if the measure also erodes future income tax revenue. As the state’s former Finance Director and the Governor’s former chief economic and business advisor put it: “It would introduce radical complexity, guarantee legal chaos, and virtually assure an exodus of high-wealth residents if enacted — all for the sake of one-time revenue that fails to address the problems California faces.”

14. Governor Gavin Newsom opposes it. The governor has warned the wealth tax would destabilize California’s finances, make the state less competitive, and drive investment, employers, and taxpayers out of the state. 

15. The next governor of California opposes it. Both candidates for governor — Democrat Xavier Becerra and Republican Steve Hilton — oppose the tax and have warned it will “drive business out of state” and is “sketchy policy”. 

16. The French architects of this tax view it as an “experiment”. This would be the first net wealth tax in modern U.S. history and the French academics who drafted Prop. 40 see California as the ideal place to test their idea, affirming that: “It’s going to be an experiment. We see the results, and then we decide whether that experiment works, is promising.”

17. Similar wealth tax measures have failed around the world. In 1990, 12 industrialized countries levied a wealth tax. By 2025, nine countries had repealed theirs, including France, Denmark, Germany, the Netherlands, and Sweden because they raised little revenue, created high administrative costs, and spurred significant outflow of wealthy individuals and their money. 

18. It will not actually address income inequality. As Governor Newsom stated: “You may not be able to pick up and move to Texas or Florida to shelter your income from taxation, but I promise you that billionaires can, and do. Wealth is movable, and it shops for the state with the lowest taxes.”  

19. It makes California less competitive. A wealth tax makes California less competitive, discouraging entrepreneurs, start-up founders, investors, and other employers from building and growing business here — putting future jobs and economic growth at risk. 

20. It jeopardizes the state’s innovation edge. Andersen Institute for Finance and Economics research finds that other states and innovation clusters have already gained ground on California in recent years and further relocation or expansion in other markets driven by this tax could erode the state’s competitiveness and innovation economy.

21. It will depress employment in sectors key to California’s competitiveness. Research shows that this tax would lower the level of employment in California’s high-tech sector — with spillover effects depressing employment in other sectors as well.

22. It will lead to more taxes and higher taxes. This “one-time” tax only provides temporary funds, but when the money runs out, expect the proponents to come back for more. One study of state tax hikes found more than half of temporary measures became permanent or were replaced with other tax increases.

23. Wealth tax backers are already moving the goalposts. Recently, one prominent proponent wrote: “the tax should not stop at billionaires, it must reach centimillionaires. The tax has to reach all fortunes $50 million and up,” while another affirmed that: “I view the 2% minimum wealth tax as an irreducible floor, but certainly not a ceiling…It will be easier to achieve the desired level of tax progressivity once a solid and consensual foundation is in place.”

24. It lacks accountability and safeguards against wasteful spending. There’s little accountability to ensure new revenue is spent efficiently, transparently, or delivers the outcomes promised. This means insurance companies could pad their profits with no guarantee Californians get better care or see lower costs and premiums. The California Medical Association put it best: “This measure has no safeguards to ensure the revenue generated is directed toward patient care. There is no meaningful oversight or accountability structure to guarantee that promised funds reach Medi-Cal patients, providers, clinics, or communities in need.”

25. It gives the Legislature the power to amend and expand the tax after it passes. A hidden provision in the measure gives legislators the power to make changes to the tax after it passes, without voter approval, which means it could be expanded or even target Californians’ savings or retirement accounts. As the California Business Roundtable warns: “They can change the level of taxation; they can change how often they get taxed; they can keep ratcheting down the income level of who pays it.” 

26. State spending has already increased by more than $100 billion since 2019. California’s General Fund has grown larger and more rapidly than ever before, yet many residents in communities across the state continue to face challenges accessing affordable healthcare, housing and other essential services. 

27. Legal challenges are likely to delay collection for years. Legal analyses suggest California could spend years defending the tax before it sees meaningful revenue — if it sees that revenue at all.

28. It could be invalidated because of major constitutional vulnerabilities. The measure has multiple constitutional vulnerabilities embedded in its design that could lead a court to narrow or invalidate the initiative in whole or in part.

29. Major design flaws and defects complicate administration and enforcement. The tax’s projected revenues depend on legal, valuation, and enforcement assumptions that may not hold in practice.

30. It threatens other measures on the ballot intended to help stabilize state finances. The measure creates uncertainty for other ballot initiatives that seek sustainable, reliable, long-term funding for critical public services. 

31. The tax will cost tens of millions to administer every year. Implementing and enforcing a first-of-its-kind wealth tax would require complex asset valuations, audits, legal enforcement and an expensive new bureaucracy and will cost tens of millions per year to oversee. 

32. Public safety leaders oppose it. Public safety leaders, including the California Professional Firefighters, California State Sheriffs’ Association, and the Peace Officers Research Association of California — the state’s largest law enforcement organization — oppose Prop. 40 because “by further destabilizing California’s finances, this scheme is not just reckless — it’s dangerous.” 

33. Housing leaders oppose it. Housing advocates and affordable housing providers, including Housing Action Coalition, California YIMBY, California Council for Affordable Housing, California Housing Consortium, and Housing California oppose the tax because it “puts at risk the very programs California depends on to build housing.”

34. Business leaders oppose it. Employers, entrepreneurs, and business organizations, including the California Chamber of Commerce, local Chambers of Commerce, Bay Area Council, California Taxpayers Association and many others warn Prop. 40 would make California less competitive, drive investment elsewhere, and cost California jobs. 

35. Local leaders oppose it. Opposition continues to grow at the local level, including from San Francisco Mayor Daniel Lurie who warned that “people can up and flee” and San Jose Mayor Matt Mahan who cautioned that it “threatens the industry that my community, San Jose, Silicon Valley, relies on.” Former Stockton Mayor Michael Tubbs, who founded Mayors for a Guaranteed Income, and End Poverty in California, is also opposed, among others.

36. Labor leaders oppose it. Labor leaders from the State Building and Construction Trades Council of California and California Conference of Carpenters oppose the wealth tax, with more opposition to come, because Prop. 40 “will drive away capital…threatening construction jobs, our infrastructure, and California’s future.”

37. Economists oppose it. Independent economic experts with Stanford University, the Andersen Institute for Finance and Economics, and a number of other institutions warn the measure would raise far less revenue than promised while reducing future state tax revenues and economic growth, among many other concerns. 

38. Editorial boards already oppose it. Editorial boards from the Los Angeles Daily News and the California Post to the Washington Post have concluded the wealth tax is a risky experiment that would hurt California’s economy, will fail to deliver the revenue promised, and should be defeated.  

39. Opposition is bipartisan. It’s rare these days for Democrats and Republicans to agree on anything, but leaders from both parties are coming together to say “NO” to the wealth tax. 

40. Once voters learn more, they oppose the tax by double digits. A recent survey of likely voters across California finds strong majority opposition to the proposed wealth tax, with voters rejecting the measure 54% to 38% — a 16-point margin — after reviewing the title and summary.