Proposition 40 puts a one-time billionaire tax before Pleasanton voters

Pleasanton voters will help decide whether California should collect a one-time tax on billionaire wealth in the Nov. 3 election. Proposition 40 would change both the state Constitution and state law, directing most of the proceeds toward health care.

The attorney general’s official summary describes a tax of up to 5% for certain taxpayers with covered assets worth more than $1 billion. Businesses, securities, art, collectibles and intellectual property count toward the tax. Real estate and some pension and retirement holdings are excluded.

For individuals, the proposed law uses California residency on Jan. 1, 2026, and values covered net worth on Dec. 31, 2026. The rate phases in between $1 billion and $1.1 billion. Payment would be due in 2027; the Legislative Analyst’s Office says taxpayers could spread payments over five years at an additional cost.

After administrative expenses, 90% of the revenue would go to a health care account and 10% to an education and food assistance account. The measure prohibits using the proceeds to replace existing funding for those purposes.

The proposed law also gives legislators amendment authority. Section 50310 requires approval from two-thirds of the membership of each legislative house and requires changes to remain consistent with, and advance, the act’s purposes. The purposes section and proposed constitutional provisions describe a one-time tax on billionaire wealth. That is the language voters are considering; it does not settle how a future disputed amendment would be interpreted.

The Legislative Analyst’s Office estimates temporary revenue of tens of billions of dollars over several years, alongside a possible ongoing drop in state income-tax revenue of less than $1 billion annually.

A yes vote supports establishing the tax; a no vote opposes it. The official analysis also warns that conflicting provisions in Propositions 41 or 42 could prevent Proposition 40 from taking effect if either receives more yes votes than Proposition 40.

Readers can compare the proposal, official analysis and arguments on the state voter guide’s Proposition 40 page.