BILLIONAIRE TAX WINS “YES” VOTE ENDORSEMENT FROM CALIFORNIA DEMOCRATIC PARTY

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Proposition 40 Executive Brief

Trump and the MAGA Republicans have created a healthcare crisis in California.

The “Big, Ugly Bill” slashed healthcare funding to pay for billionaire tax breaks. Now insurance premiums are skyrocketing, Medi-Cal coverage is being eliminated, and hospitals and ERs across the state are at-risk of closure.

The solution is Proposition 40. Prop 40 will make billionaires finally pay their fair share in taxes and stop sticking the middle class with the bill.

This brief provides essential information on Proposition 40: why it’s needed, how it works, the benefits for California, and the growing support for the ballot measure across the state.  

Please use the links to navigate and reach out to our Deputy Campaign Manager directly with any questions:

Shelbi Augustus
213-304-3063
saugustus@seiu-uhw.org

To endorse Prop 40, you can go directly to our digital endorsement form.

Thank you for your consideration. We look forward to talking with you in the days ahead and earning your support!

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Support Proposition 40

To save lives, tax billionaires, and protect California healthcare, we need your help.

Here are important next steps in the fight for Prop 40:

  1. Review our Prop 40 materials with details on the proposal.
  2. Endorse Prop 40, starting by filling out this digital form.
  3. Reach out to fellow CADEM Executive Board members and your networks to join us, and share this briefing and our online toolkit.
  4. Vote YES on endorsing Prop 40 at the CADEM Executive Board.
  5. Reach out with questions to Deputy Campaign Manager Shelbi Augustus (213-304-3063; saugustus@seiu-uhw.org).

Thank you for your support.  Let’s get to work!

Why Prop 40 is Needed: California's Healthcare Crisis

Trump’s “Big, Ugly Bill” slashed funding for healthcare in California to pay for more billionaire tax breaks. These cuts eliminate healthcare coverage for over a million Californians and double health insurance premiums for millions more. 

Now clinics across California are closing, hospitals are laying off workers, and life-saving services are being cut.

Without intervention:

  • Local hospitals and ERs that depend on Medi-Cal funding will soon be forced to close their doors forever.
  • An estimated 145,000 healthcare jobs will be lost.
  • Millions of California businesses will face higher insurance premiums.
  • Patients will have reduced access to preventive care, including chronic-disease management, maternal health, and pediatric services, which increases long-term costs and destabilizes families.

The crisis is growing day by day:

  • 83 hospitals are at high risk of closure or serious service cuts.
  • 3,400 healthcare workers have already lost their jobs.
  • The Los Angeles County Department of Public Health has closed seven clinics in communities from Antelope Valley to Torrance.
  • Santa Clara Valley Healthcare expects to eliminate 218 jobs this year.
  • Pomona Valley Hospital Medical Center plans to lay off 260 healthcare workers, and is struggling to find additional revenues.
  • The San Joaquin Valley has multiple hospitals at high risk of closure and care cutbacks.
  • Planned Parenthood closed five clinics last July in the Bay Area, Santa Cruz, and Central Valley, all in response to federal funding cuts. And other California clinics remain at risk of reducing services.

The Solution: What Proposition 40 Does

The Prop 40 ballot measure will give Californians the opportunity to vote YES to keep local hospitals and ERs open, fund food aid, and support K-14 public education through a one-time tax on the state’s ultra-wealthy billionaires.

  • The measure applies only to billionaires with more than $1 billion in worldwide wealth. There are about 250 individuals who collectively hold $2.2 trillion in wealth, most of which is never taxed under current law. 
  • The Billionaire Tax would generate roughly $100 billion over five years, closing the gap on these devastating federal cuts.
  • 90% of funding would stabilize California’s healthcare system and protect healthcare statewide. And 10% would support K-14 public education and food assistance. 
  • The initiative was shaped by the leading experts in this area – and includes safeguards designed to prevent tax avoidance. All billionaires who were residents of California as of January 1 of this year will be subject to the tax. 

Fiscal Impact & Timing

Revenue goes to a special fund that is set aside 90% for healthcare programs, including Medi-Cal. The legislature has the discretion to allocate those funds to restore cuts or otherwise invest in health care access and shore up the safety net. The other 10% is allocated to K-14 public education as a preemptive measure in anticipation of looming direct and indirect impacts on education. 

Exaggerated claims that the proposed California Billionaire Tax will “backfire” by disproportionately eroding the state’s income tax revenue have proven false. This is both because billionaires have not fled the state en masse, and because most billionaires pay such little income tax proportionate to their wealth that any loss in revenue would pale in comparison to what Proposition 40 will generate to save healthcare and the state’s economy.

In fact, the billionaire tax would generate $100 billion dollars, which amounts to roughly 33 years of revenue based on the $3 billion per year that billionaires currently pay in California individual income taxes.

  1. Billionaire tax becomes effective upon passage in November 2026.
  2. Wealth valuation date = 12/31/2026 (so the tax is levied on billionaires’ wealth measured as of 12/31/2026).
  3. Taxpayers can make tax payments over five years, in equal installments.
  4. Residency rule for tax eligibility: if a billionaire moves to CA in 2026, they do not pay the Billionaire Tax. If a billionaire leaves CA in 2025, or moves to CA in 2025, they pay 75% of the tax (or a 3.75% tax on net worth). If a billionaire leaves CA in 2026, they pay 100% of the tax. 
    1. 2026 arrival – billionaire pays no tax
    2. 2026 departure – billionaire pays 100% of the tax
    3. 2025 departure or arrival – billionaire pays 75% of the tax

Who Benefits

All Californians will benefit from Proposition 40 due to its role in shoring up California’s healthcare system in the midst of crisis.

  • Californians facing food insecurity will see additional funding for the state’s food assistance programs.
  • Californians on Medi-Cal will be able to stay on their coverage.
  • Residents of cities and rural communities across the state will continue to have access to local hospitals, ERs, and Planned Parenthood health centers.
  • Patients are less likely to face rising prices from healthcare facilities struggling to stay open.
  • Healthcare workers will keep their jobs and continue serving patients; over 145,000 healthcare worker jobs are currently at risk.
  • Private insurance policyholders and small businesses will avoid skyrocketing premiums from the ripple effect of federal healthcare cuts.
  • Californians with chronic illnesses will continue to have chronic-disease management available in their communities.
  • Parents and families will not face the closure of local maternity and pediatric care facilities, or the resultant longer distances to reach care when it is essential.
  • Students will benefit from supplemental funding for K-14 education.
  •  

Polling

Voters support Proposition 40.  We submitted over 1.6 million signatures, more than double the number needed. 

Public polling data consistently shows that California voters support a one-time tax on billionaires by significant majorities. A recent poll shows 64% of voters favor the billionaire tax, with 50% of respondents expressing strong support, and an additional 14% saying they lean towards supporting the proposal. 

55% of Latinos, 62% of Black voters, and 66% of AAPI voters would vote yes on Proposition 40.

70% believe working to ensure massive federal funding cuts don’t eliminate health care for millions of Californians, skyrocket premiums for millions more, and force hospitals and clinics to close should be a bigger priority for the Governor, rather than campaigning and working behind the scenes to defeat the billionaire tax because he believes it will hurt California and its economy by driving billionaires out of state (30%).

Myths & Realities

Waiting for Washington is not a plan. Federal action may be years away, while healthcare cuts are happening NOW. The Billionaire Tax is a state-level solution that Californians can vote on in November to protect patients and save lives.

National proposals let billionaires off the hook. At a moment when our state’s healthcare system is facing $100 billion in devastating cuts, Californians deserve a real solution—not a political distraction.

The Billionaire Tax was designed to address an urgent healthcare crisis that is happening NOW. Criticizing it for not solving every issue facing the state ignores the reality that Californians need action now to keep hospitals, emergency rooms, and clinics open. And that without this solution, people will die.

The California Billionaire Tax will help protect care at all healthcare providers, including Planned Parenthood. Federal cuts have put hospitals, community clinics, and reproductive healthcare providers at risk. The California Billionaire Tax would provide critical funding to help preserve access to care for millions of Californians.

Healthcare workers, union members, community leaders, and voters across California support Prop 40 because they understand that with a one-time 5% tax on billionaires, we can keep hospitals and ERs open, fund food assistance and public education. It’s past time for billionaires to pay their fair share in taxes. 

The handful of union or organizational leaders who oppose it are going against the very people they claim to represent. 

In addition, many of the state’s largest unions, including Teamsters California, AFSCME, UNITE HERE Local 30, UNITE HERE Local 11, SEIU-UHW, and the Committee of Interns and Residents of SEIU were early endorsers of this common-sense measure.

The first quarter of this year showed the most venture capital coming into California than ever before, not less, so that means more job opportunities, not fewer. 

Our state has more billionaires now and their wealth continues to grow. Over the past six years, billionaire wealth has grown by 212%. A one-time 5% tax is not significant at this level of limitless wealth. 

Every time a wealth tax is proposed, there’s this myth that the super wealthy will all leave. That didn’t happen in Massachusetts or Washington state when they implemented taxes on the super wealthy. They saw MORE high-wealth people, MORE cumulative wealth, and MORE revenue to fund essential services. 

And because our state is an amazing environment with world-class universities, talent pool, and resources for innovation, we don’t see billionaires leaving. 

Right now, teachers, firefighters, nurses, all pay a higher tax rate than billionaires. The billionaire tax will change this and prevent a total healthcare collapse.

The math is clear — 4 million California businesses are going to shoulder the financial burden of $100 billion in federal healthcare cuts if we do nothing. The Business Roundtable should be focusing on preventing this by making sure billionaires pay their fair share, not catering to them and scaring retirees and working people. 

Here are the facts: this ballot measure clearly says that the purpose of the act is to enact a one-time tax on California’s billionaires. This is the ballot measure language: The purpose of the 2026 Billionaire Tax Act is to “protect access to high quality, equitable health care, and to support funding for kindergarten through grade fourteen public education and food assistance programs, by raising revenue from a one-time tax on billionaire wealth.

The initiative does allow our legislature to update this ballot measure by statute with policies that would strengthen or improve this exact purpose, if those said policies are passed by a two-thirds vote in the legislature (from section 50310). That’s it.

The California Billionaire Tax allocates funding for K-14 education, and for nutrition assistance to make up for the disastrous cuts made by Republicans in Washington. 

Most billionaires pay such little income tax proportionate to their wealth that any loss in revenue would pale in comparison to what the California Billionaire Tax will generate.

This scare tactic is very old and just not true. 

Exaggerated claims that the proposed California Billionaire Tax will “backfire” by disproportionately eroding the state’s income tax revenue have proven false as well. This is both because billionaires have not fled the state en masse, and because most billionaires pay such little income tax proportionate to their wealth that any loss in revenue would pale in comparison to what the California Billionaire Tax will generate to save healthcare and the state’s economy.

In fact, the billionaire tax would generate $100 billion dollars, which amounts to roughly 33 years of revenue based on the $3 billion per year that billionaires currently pay in California individual income taxes. 

In addition, the first quarter of this year had the most venture capital coming into California than ever before. There’s more investment in California businesses now, not less.

And that we are facing massive federal healthcare funding cuts that will collapse key parts of the California healthcare system and force hospitals and ERs to close their doors forever, because billionaires insist on paying less.

Exaggerated claims that the proposed California billionaire tax will “backfire” by disproportionately eroding the state’s income tax revenue have proven false.

This is both because billionaires have not fled the state en masse, and because most billionaires pay such little income tax proportionate to their wealth that any loss in revenue would pale in comparison to what the California Billionaire Tax will generate to save healthcare and the state’s economy.

For more evidence, look no further than Massachusetts and Washington – both states raised taxes on wealthy residents that generated billions in new revenue for public services –  the number of high-income residents AND their cumulative wealth in both states have INCREASED since the policies went into effect.

Garry Tan and others have falsely claimed that some super-voting shares will be taxed at much greater amounts than their actual value, resulting in effective tax rates of 50% or more, rather than the 5% one-time tax the billionaire tax provides for. 

For instance, he claims that the founders of Alphabet (the holding company that owns Google) will pay a tax rate of 50% or more, because they hold 50% of the total voting power of Alphabet shares. These claims are absurd. 

Said plainly, under the Billionaire Tax, billionaires will not be taxed on more than the actual market value of their holdings. Publicly traded assets are valued at their fair market value on the valuation date.

Billionaires exploit multiple tax loopholes to use their “illiquid” and “deferred” assets like real money, allowing them to live, buy yachts, and spend lavishly while also avoiding having to pay taxes on those same assets.

The US Supreme Court has upheld tax rules that reach back to the beginning of the year, or even farther, for more than a hundred years, going back to the retroactive 1913 enactment of the federal income tax. 

And recent California tax ballot measures, like Prop 30, are also retroactive to the start of the year — so we’re confident the billionaire tax is legal and will be upheld. 

This ballot measure was carefully designed to be fair, enforceable, and legally sound. Even if it’s challenged after voters approve it this November, qualifying billionaires would still be required to pay the tax while the courts review the case.

The initiative will also save jobs in countless other industries by preventing skyrocketing premium spikes that 4 million California businesses will face unless action is taken to backfill the $100 billion in cuts from HR1.

Source: https://laborcenter.berkeley.edu/california-could-lose-up-to-217000-jobs-if-congress-cuts-medicaid/

Endorsements

The YES on 40 – Billionaire Tax Now Coalition has amassed hundreds of endorsements, including from many of the state’s largest unions and advocacy organizations fighting for economic justice.  Here are just a few:

  • U.S. Senator Bernie Sanders
  • Congressman Ro Khanna
  • Congresswoman Judy Chu
  • State Superintendent of Public Instruction Tony Thurmond
  • State Senator Lena Gonzalez 
  • Assemblymember Alex Lee
  • AFSCME California (125,000 members)
  • AFT Local 1521 
  • Black Women Organized For Political Action
  • CA LULAC
  • Color Of Change
  •  Committee of Interns and Residents (CIR) (40,000 members)
  • Disability Voices United
  • Our Revolution California 
  • Oxfam America
  • Patriotic Millionaires 
  • SEIU-UHW (120,000 members)
  • Teamsters California (250,000 members)
  • UNITE HERE Local 11 (32,000 member)
  • UNITE HERE Local 30 (7,500 members)
  • Santa Barbara County Democratic Party
  • Ventura County Democratic Party

Click here to complete our digital endorsement form, and join us in the fight to save California’s healthcare!