Raising taxes on billionaires has emerged as a top priority for progressives. But even in deep blue California, that has proven easier said than done.
Less than two weeks before Election Day, opponents of a ballot measure that would impose a one-time tax on the wealthiest Californians have a staggering 250-to-1 ad-spending advantage over supporters. Public polls show the “yes” side with a narrow advantage but short of majority support. A pair of dueling initiatives on the ballot threaten to effectively invalidate the wealth tax, even if it passes.
And while there’s been notable radio silence on the measure from some progressive leaders in the state and nationally, there have also been forceful arguments against it coming from others on the left who support increasing taxes on billionaires in general but are frustrated with the specifics of the California proposal before voters.
“For me, a wealth tax is likely to be part of how we reset our economy to provide more economic opportunity for the 99.9% — but this proposition is poorly designed and will likely be poorly executed, and could actually set back this really important cause of figuring out and applying the best kind of wealth tax to help reset our economy,” progressive former Rep. Katie Porter said in an interview.
“A one-time tax on only a couple hundred people? It is a swing and a miss,” added Porter, who ran unsuccessfully for governor this year.
Proposition 40 would levy a one-time 5% tax on the assets of Californians whose net worth exceeds $1.1 billion, and a smaller one for those between $1 billion and $1.1 billion.
It would require California to spend 90% of that new revenue on healthcare, with the remaining 10% split between education and other programs. The tax would apply retroactively to anyone living in the state as of Jan. 1, 2026.
The tax would impact between 200 and 240 billionaires in California. The healthcare union behind the proposal has projected that it would raise about $100 billion over five years.
In addition to Porter, Democratic critics of the ballot measure include outgoing Gov. Gavin Newsom, gubernatorial candidate Xavier Becerra, some of the state’s largest unions — including the California Teachers Association and the California Medical Association — and the state’s Planned Parenthood chapter.
Opponents of Proposition 40 argue it could prompt wealthy individuals to leave the state, potentially throwing its revenue system into havoc. And, some say, it would only benefit one in-need sector.
“The best argument that these have is that healthcare is really important and people don’t want to lose it. To which I say ‘true,’ but this wealth tax could be so much more in addressing healthcare, not just plugging a hole in a system that, in some ways, is kind of, in my opinion, a for-profit healthcare system that’s pretty rotten to its core,” Porter said.
She predicted its defeat, in no small part because of the massive effort that’s been launched to defeat it. Even some supporters of the measure are starting to worry about their chances.
“It’s not great for the movement when we have trusted messengers splitting on it,” said state Rep. Alex Lee, the chair of the California Legislative Progressive Caucus. “But it’s also revealing that certain politicians will rather bend over for their billionaire donors than side with California and its people.”
Groups opposed to Proposition 40 have spent a combined $88.7 million on ads and reservations through the election, according to the ad-tracking firm AdImpact. The biggest spender, at nearly $57 million, has been the group No on Prop. 40, a coalition that includes the CTA, the CMA, Planned Parenthood, and dozens of other unions and housing groups. It has also received the financial backing of several prominent billionaires.
Two other groups — Building a Better California, which has received millions from Google co-founder Sergey Brin, and Californians Against Wasteful Spending, which is backed by the California Business Roundtable — have put in another $26 million for ads.
By contrast, groups supporting the ballot measure have spent or booked just $343,000 in ads through the same period.
Many of the ads from the billionaire tax’s opponents highlight that Democratic-aligned groups are against it, while warning of detrimental effects they say it could have on the state’s economy.
“Why do California’s teachers, doctors, and firefighters all oppose Prop. 40? Because the so-called wealth tax is deeply flawed and will devastate our economy, costing the state billions, while doing nothing to lower healthcare costs,” the narrator in one of the most prevalent ads says.
“Teachers, firefighters, carpenters, and Planned Parenthood affiliates of California all have this in common,” the narrator in another spot says. “They all oppose the so-called wealth tax, a dangerous experiment that could cost California $25 billion in tax revenue.”
Meanwhile, opponents secured ballot access for two competing measures that would effectively nullify Proposition 40.
Proposition 41 would require the state auditor to review new special tax measures and that any new tax would be counted toward a voter-approved state spending limit.
And Proposition 42 would ban any new taxes on the ownership of assets such as investment accounts and property (taxes are typically paid on income, not unsold assets). It would also restrict the situations allowing the raise of retroactive taxes.
Based on how they are written, both would go into effect by earning just one vote more than Proposition 40.
Newsom is a notable backer of Proposition 42. Groups supporting it spent $31.7 million on ads and bookings for future ads through the election, according to AdImpact, while groups opposing it haven’t spent anything. There has been no spending on the airwaves for or against Proposition 41.
The massive spending push appears to be tightening the race down the homestretch. A Politico/Citrin Center poll released this week found that 46% of likely voters supported Proposition 40, with 43% opposed, inside the margin of error; 10% were undecided.
An NBCUniversal Local/Telemundo Station Group poll in late September found that 48% likely voters said they supported the measure, compared to 38% who were against it — outside the margin of error — with 14% undecided.
California political observers have said that garnering support below a majority so close to an election is a warning sign.
“This follows a pattern of a lot of initiatives in California that I’ve been following for three decades, where there is just a slow drop in support,” said Ted Lempert, a former state Democratic assemblymanwho teaches political science at the University of California, Berkeley.
He added that traditionally Democratic voters were likely to be particularly confused by the split on the left over the measure.
“Most California voters have now seen that the teachers union is against it, for example, and when it comes to something like that, it immediately raises a question for a voter: Why are the teachers against this?”
“When undecided voters are confused, they will often vote no,” Lempert said.
The pro-Proposition 40 side has called in its most prominent supporters to help make the case in the closing stretch. Chief among them: Sen. Bernie Sanders, I-Vt., who held rallies in San Francisco and Los Angeles this month. Those rallies, which also included Rep. Ro Khanna, D-Calif., a potential 2028 White House contender, were featured in a wave of recent digital ads.
Their presence, however, has prompted questions of why other prominent progressives who have long advocated for taxing the rich haven’t taken a stand on Proposition 40. That includes Rep. Alexandria Ocasio-Cortez, D-N.Y., who has not weighed in publicly on the measure, even as she has appeared at other campaign events throughout the country with Sanders.
Ocasio-Cortez, also seen as a possible future presidential candidate, is scheduled to head to California later this week to campaign for a House candidate. A spokesperson for Ocasio-Cortez didn’t respond to questions for this story.
Many of California’s top Democrats have also not taken a side on Proposition 40. That includes former Vice President Kamala Harris, who also did not respond to questions from NBC News, as well as former House Speaker Nancy Pelosi and Sens. Alex Padilla and Adam Schiff.
“It’s of course sad to see that AOC and other folks haven’t jumped in,” said Lee, the progressive California Assembly member.
SEIU-United Healthcare Workers West President Dave Regan, who has led the effort behind the measure, acknowledged the challenges his group faced. But he maintained that polling shows that they are “holding our own” and slammed the billionaires funding the opposition.
“I wish we had $100 million to spend, but we don’t,” Regan said. He said that the “yes” side was “running a David versus Goliath on steroids campaign — and at least we have a chance.”