Frequently Asked  Questions

Prop 40 is a statewide ballot measure that, if approved by voters, would impose a one-time tax of 5% on certain California taxpayers with more than $1 billion in assets. Despite enormous funding needs for priorities like education, infrastructure, public safety, housing, Prop 40 measure earmarks 90% of funds for just one purpose — healthcare — but lacks the accountability to ensure funds actually lower premiums and improve access to care.

The remaining 10% of funds are allocated to education and food assistance-related programs, yet by exempting itself from Proposition 98 — which is a constitutional protection for guaranteed education funding — Prop 40 shortchanges schools and students out of roughly $3 billion annually ^{^1}. The measure is the first net wealth tax in modern U.S. history and nothing like this has ever been done in California. It’s why the French academics behind Prop 40 call it an “experiment.”

Prop 40 is already impacting California’s economy and budget, and while it may be described as a one-time tax, its consequences will last for many years.

Economists warn Prop 40 will discourage investment and drive wealthy taxpayers — who pay nearly half of the state’s income taxes — and businesses out of California. Just the mere threat of this measure has already made this warning a reality. At least six of California’s most successful entrepreneurs and innovators have already departed as a result of Prop 40, removing $536 billion — or nearly 30% of aggregate billionaire wealth — from the state’s tax base^{^2}.

The state's nonpartisan Legislative Analyst’s Office has also affirmed that Prop 40 could reduce state revenue and leave less money for education, healthcare, housing and public safety.^{^3} And Stanford University research estimates Prop 40 will leave the state worse off by $25 billion because of lost tax revenue ^{^3}.

Prop 40 will permanently impact the state’s ability to fund essential services. Californians deserve smart, proven tax proposals that provide stable funding, accountability and results.

No. California must protect access to healthcare, especially as federal funding cuts threaten this safety net. But Prop 40 is simply the wrong approach and will not deliver on its promises.

This is why care providers, community clinics, doctors and women’s health advocates — who proponents claim will benefit most — all strongly oppose Prop 40 and have raised serious concerns about the tax. They warn that it relies on an unstable revenue source, has no safeguards to ensure funds are actually directed to patient care and will ultimately harm the healthcare workforce and safety net it claims to protect.

Organizations opposing Prop 40 include: Planned Parenthood Affiliates of California, California Children’s Hospital Association, California Medical Association, California Primary Care Association and California Hospital Association. United Domestic Workers, which represents home health and childcare providers, also opposes the measure.

Together, these organizations represent hundreds of thousands of physicians, specialists and caregivers that serve on the frontlines. And together, they are all warning that Prop 40 will do more harm than good.

Yes. Every Californian will pay the price if the measure passes. Prop 40’s authors know that whatever revenue it generates will run out, so they included a loophole allowing the State Legislature to expand the tax — without a vote of the people^{^4}.

Prop 40 gives Sacramento politicians the power to expand the tax to include the assets of ALL Californians - your savings, your home equity, your small business and even your retirement funds.

No. Nothing in Prop 40 requires funding to be allocated towards lowering healthcare costs, reducing insurance premiums, or expanding and improving patient care. The measure has no meaningful safeguards or accountability to ensure billions in new revenue supports those who need it most.

In fact, Prop 40 allows billions of tax dollars to flow directly to health insurance company profits and executive salaries, with no guarantees families struggling with costs get a dime.

Fiscal experts from the state's nonpartisan Legislative Analyst’s Office found Prop 40 could reduce existing state income tax revenue by hundreds of millions of dollars or more each year. They noted it would “...mean less money for the state’s general budget that supports education, healthcare…and other services.” ^{^4}

Separately, Stanford University economists estimate Prop 40 will cost the state $25 billion as businesses and wealthy residents leave the state.^{^3} These entrepreneurs and innovators create new businesses, drive economic growth and already pay nearly half the income taxes that fund critical state programs in California.

Less revenue means fewer dollars for the services and support Californians depend on.

When California faces significant budget shortfalls, cuts to core priorities follow. This could include shortening the K-12 school year, reducing community college course offerings and enrollment, raising tuition at public universities, closing or reducing services at state parks, deferring infrastructure projects and maintenance, and limiting enrollment in health programs.

A permanent reduction in state revenue forces difficult choices for years to come.

No. Prop 40 actually shortchanges schools and classrooms billions of dollars annually.^{^2}

That’s why California teachers, educators and school administrators are opposed to Prop 40. Public education depends on sustained, stable revenue streams that our schools and leaders can count on when making decisions — Prop 40 fails to provide this.

Yes. Prop 40 would set a dangerous precedent by allowing California to tax accumulated wealth and assets for the first time in state history.^{^5} Californians already pay taxes on income when they earn it, and Prop 40 could allow that same income to be taxed again when it is saved in accounts like retirement funds.

A fast-growing coalition of California doctors, teachers, labor unions, community clinics, firefighters, healthcare providers, first responders, civil and social justice advocates, working families and many others strongly oppose Prop 40, including:.

Opposition to Prop 40 is also bipartisan, with Governor Newsom, both gubernatorial candidates (fmr. HHS Secretary Xavier Becerra and Steve Hilton), legislators, mayors and many as they urge Californians to reject the measure in November. Take a look at what they are saying.

The measure was drafted by two French academics who’ve peddled similar schemes in France and through the European Union. We take them at their word when they describe Prop 40 as an “experiment” and note that these taxes establish an “irreducible floor, but certainly not a ceiling.” They even acknowledge it could have unintended consequences.

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.

Prop 40 is no different. The measure was pieced together using a spreadsheet of estimates and assumptions. The authors actually admit to using Forbes rankings and Wikipedia-esque sources as foundational data — not official, verified tax records.

California’s economy and funding for essential services should not be subjected to this experiment. We aren’t test subjects, and there is too much at stake.

Prop 40 will be on the November general election ballot. As a California voter, a ballot will be mailed to you at the beginning of October. Once you officially VOTE NO on Prop 40 you can mail your ballot back or drop it at a ballot drop box on or before election day. If you don’t vote by mail, you can also VOTE NO on Prop 40 in person.

Signing up to be a member of our coalition is the best way to get involved and join the fight against Prop 40. We’ll be sending you important updates and opportunities to spread the word about why Californians should VOTE NO on Prop 40.