Contest 9 of 14
Proposition 40
Imposes One-Time Tax on Certain Taxpayers. Initiative Constitutional Amendment and Statute.
Fiscal Impact
Short Term
One-time money: tens of billions of dollars in wealth tax, spread over several years — about $6 billion a year while it lasts.
Long Term
Possible ongoing dip of less than $1 billion a year in income tax collected from billionaires.
Social Impact
- The measure imposes a one-time tax of up to 5% on taxpayers with covered assets over $1 billion, including businesses, securities, art, collectibles, and intellectual property.
- Revenues are allocated 90% to health care and 10% to food assistance or education-related programs, and may not replace existing funding for those purposes.
- Supporters say the tax will raise about $100 billion from about 200 billionaires to keep hospitals and emergency rooms open and health coverage in place.
- Opponents say the tax will drive companies and wealthy residents out of state and cost California $25 billion in revenue for schools and health care.
A YES vote means:
Billionaires pay a one-time tax of 5% of their wealth, raising tens of billions of dollars over several years, mostly for health care; the state might also see an ongoing decrease of less than $1 billion a year in income tax collected from billionaires.
A NO vote means:
No one-time wealth tax is collected from billionaires.
Cost (Legislative Analyst): Temporary revenue increase of tens of billions of dollars spread over several years from wealth tax on billionaires. Possible ongoing decrease of less than $1 billion per year in income tax revenue from billionaires.
How these interact: Propositions 41 and 42 each say that if they pass with more YES votes than a conflicting measure on this same ballot, the conflicting measure does not take effect. Proposition 40 is a measure on this ballot that those rules could reach.
Source: CA Secretary of State, Official Voter Information Guide