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Californians are voting Tuesday on Proposition 40, a one-time 5% tax on billionaires’ wealth, the first of its kind in the U.S. But Propositions 41 and 42, both backed by Google co-founder Sergey Brin, could cancel the tax even if a majority approves it.
The union behind Proposition 40 estimates the tax would raise $100 billion over five years. The state’s official fiscal estimate is lower, at tens of billions of dollars spread over several years.
Brin has given $102 million to Building a Better California, a committee he founded to fight the tax. As of Oct. 9, state campaign filings show the group was also the top donor to both countermeasures, with $58.3 million for Proposition 41 and $112.8 million for Proposition 42.
How could Propositions 41 and 42 block California’s 5% wealth tax?
California’s constitution settles clashes between ballot measures by vote count. When competing measures pass at the same election, the one with the most “yes” votes takes effect and its rivals are nullified. All three measures also include clauses spelling out that rule.
Proposition 41 bans any new state tax that is exempt from California’s spending limit, a cap on state spending that voters adopted in 1979. Proposition 40 keeps its revenue in a separate fund outside that cap, which puts the two measures in direct conflict.
Proposition 42 bans new state taxes on owning savings, investments, retirement accounts and other personal property. It also bans taxes based on where someone lived before the law took effect, and Proposition 40 applies to billionaires who lived in California on Jan. 1, 2026.
So a voter who backs the wealth tax but also says yes to either countermeasure is adding votes to both sides. If supporters of Proposition 40 dispute that the measures conflict, the question could end up in court.
What do the latest polls show for California’s 5% wealth tax?
The Public Policy Institute of California surveyed 1,086 likely voters Oct. 16-22. It found Proposition 40 trailing, 46% to 52%, after it led 52% to 46% in September. The margin of error was plus or minus 3.8 percentage points.
The same survey found Proposition 41 effectively tied, 48% to 49%. Proposition 42 led 51% to 47%, making it the only one of the three with majority support.
A Berkeley Institute of Governmental Studies poll of 1,477 likely voters, taken Oct. 19-25, found all three measures behind. Proposition 40 trailed 42% to 50%, Proposition 41 trailed 38% to 47%, and Proposition 42 trailed 43% to 45%. Its margin of error was about 3 percentage points.
That poll also found that only 55% of likely voters knew Propositions 41 and 42 had been placed on the ballot by opponents of the tax. If Proposition 40 fails outright, the countermeasures won’t be needed to stop it.
Who would pay California’s 5% wealth tax, and where would the money go?
The tax would apply to people worth $1 billion or more who were California residents on Jan. 1, 2026, with net worth measured on Dec. 31, 2026. Real estate they own directly is left out of the calculation.
Billionaires could pay the full amount with their 2026 state income taxes. They could also split it into five yearly installments, with a 7.5% annual charge on the remaining balance.
Under the measure, 90% of the money would go to health care, mainly Medi-Cal, California’s version of Medicaid. The other 10% would go to public schools, from kindergarten through community college, and to food aid programs. Supporters argue the money is needed to offset federal health care cuts they expect to leave 2 million residents uninsured.
Gov. Gavin Newsom opposes the tax and has endorsed Proposition 42. He argues a one-time tax won’t fix the state’s budget problems and will push wealthy residents out. The California Democratic Party and the state’s main labor federation back Proposition 40.
Billionaires and business groups have spent $316.7 million to stop the tax, including money for both countermeasures. Brin has publicly moved out of state. The state’s fiscal estimate warns that billionaire departures could cut income tax revenue by less than $1 billion a year.