For too many years, working families across California have been shortchanged in an economy shaped by corporate elites and the ultra-wealthy.
Worker productivity has climbed for decades while paychecks haven’t kept pace. CEOs, meanwhile, are pulling in hundreds of times what their employees make. California families are getting squeezed by healthcare costs rising faster than their wages. Our state and federal policies often favor billionaires over everyone else, leaving ordinary Californians to pick up the tab.
Creating a fairer California means calling out these deep systemic inequalities. We must insist that wealthy Californians pay their fair share of taxes. But holding that fundamental belief does not require us to rubber-stamp every poorly drafted policy that claims to champion tax fairness — especially one that will fail to deliver on its promises and ultimately will leave our state worse off.
Proposition 40 is a prime example of a seemingly progressive-sounding policy solution that ultimately just perpetuates the status quo. It does nothing to reform our healthcare system and would send billions in tax dollars to private health insurance companies and corporations that dominate our healthcare system.
Despite what its supporters say, Prop 40 is not a solution to our healthcare crisis. Trump-era federal healthcare cuts and rising costs pose real threats to working families, but Prop. 40 delivers only a limited, one-time transfer, not the sustainable, predictable funding required to keep hospitals, community clinics and reproductive health providers afloat.
Healthcare costs continue to outpace inflation, leaving most patients falling further behind. That is a serious policy problem that deserves attention. But Prop 40 does nothing to address skyrocketing healthcare costs.
Worse, there is zero guarantee the measure’s funds will actually help reach patients or ease the medical bills of struggling families. Instead, the revenue could easily be swallowed up by health insurance companies and executives — the very entities that helped create our healthcare crisis in the first place. Prop 40 fails, for lack of even trying, to make any reforms to the broken parts of our healthcare system.
It is hard to fathom how steering tens of billions of dollars to for-profit health insurance companies somehow solves wealth inequality or addresses our healthcare needs.
Most people don’t realize that the state contracts with private health insurance companies to provide coverage for low-income patients. These insurance companies are the biggest beneficiaries of our for-profit healthcare system. Unlike nearly every other major healthcare funding infusion in recent memory, Prop 40 does nothing to demand that these health insurance companies do more for patients with those dollars. It doesn’t do anything to increase price transparency or competition in healthcare, eliminate middlemen or change the system’s incentives to reward health instead of sickness.
Progressives who have long fought for “Medicare for All,” as I have, should resist a billionaires tax that entrenches a troubled for-profit healthcare system, rather than dismantling it.
Buried even deeper in Prop 40’s text is language that allows state lawmakers to divert funds away from healthcare toward other priorities. That is why doctors on the front lines of care, including the California Medical Association, the California Primary Care Association and Planned Parenthood Affiliates of California, are urging a “no” vote. Major tax changes should come with real strings attached to ensure the dollars are well spent. Instead, Prop 40 is a blank check to a broken system.
Prop 40’s errors aren’t just limited to healthcare. It also threatens state budget stability. California already relies heavily on a volatile tax base driven by high-income earners. According to the Legislative Analyst’s Office and economists at Stanford and UC Berkeley, Prop. 40 could actually shrink the ongoing income tax collections that sustain our state’s General Fund. Trading recurring General Fund revenue, which reliably pays for schools, public safety and healthcare year after year, for a one-time cash infusion is a bad deal for California’s future.
Supporters of the measure want to frame this election as a simple choice: billionaires versus working people. But that framing ignores reality. California voters should not be fooled by false progressive bravado. That’s why a broad coalition of teachers, building trades, firefighters and frontline healthcare organizations stands firmly against it.
You don’t have to agree with Republicans or corporate interests to vote no on Prop 40. Progressive voters shouldn’t be fooled into propping up the status quo, which is exactly what Prop 40 does. Fighting for a fairer economy requires writing smart, durable laws that level the playing field for working families, strengthen our schools and reduce healthcare costs. Prop. 40 fails on all three counts. California deserves better.
Katie Porter is a former three-term member of Congress representing California, a consumer advocate and long-time consumer rights attorney, and a leading voice in the Democratic Party for economic justice. She is a law professor at UC Irvine.