Proposition 40
Placed on the ballot by a healthcare labor union, Proposition 40 proposes to impose a one-time tax of 5% on the net worth (wealth) of individuals and trusts with more than $1 billion. Considered “wealth” would be businesses, stocks, securities, art, collectibles and intellectual property. Ninety percent of the money would go to healthcare; the remaining 10% would go to education, food assistance and tax administration. The one-time revenue would be exempted from some constitutional spending limits and school funding requirements.
Proponents claim Proposition 40 would raise about $100 billion from roughly 200 California billionaires. But the California Legislative Analyst’s Office predicts it will be much less because of the uncertainty over the value of taxable assets, who qualifies and the likelihood that some of the state’s wealthiest taxpayers would simply move out of California to avoid paying.
Proposition 40 was qualified for the ballot by the Service Employees International Union — United Healthcare Workers West (SEIU-UHW). The union has long used — or threatened to use — California ballot initiatives as leverage in its disputes with employers over labor contracts and public policies.
The union also qualified for this November’s ballot Proposition 44, which proposes to limit the executive salaries, administration and overhead costs of health centers serving medically underserved populations.
Voters may remember that in its ongoing organizing disputes with dialysis clinics, the union placed propositions on the ballot in 2018, 2020 and 2022. Voters overwhelmingly rejected all three.
In addition to the union, Proposition 40 is narrowly supported by the California Democratic Party, progressives, including U.S. Sen. Bernie Sanders, the Teamsters California, and the American Federation of State, County and Municipal Employees (AFSCME).
In a split within labor and the Democratic Party, it is opposed by Gov. Gavin Newsom, as well as by the California Teachers Association, California Medical Association, California Primary Care Association, California Children’s Hospital Association, California Professional Firefighters, State Building and Construction Trades Council of California, California Conference of Carpenters, Planned Parenthood Affiliates of California, California Chamber of Commerce, California Taxpayers Association, California Hispanic Chambers of Commerce, California Asian Pacific Chamber of Commerce, and the California School Boards Association.
California voters also should oppose Proposition 40, which creates a one-time fund that does not solve the state’s health problems — escalating costs, facilities closures and millions losing their health insurance. It narrowly funnels tax revenues to limited beneficiaries, at the expense of other critical public programs. And it will do ongoing harm to the state’s economy by driving out some of its wealthiest residents and businesses.