Why California Can Still Raise Billions for Healthcare

VOTE YES ON PROP 40

Vote Yes on Prop 40 to turn extraordinary private wealth into funding for the hospitals, clinics, and the coverage our families and communities need. A prediction that some people may move is not proof that the tax cannot raise money.

The facts at a glance

The California LAO (Legislative Analyst’s Office) estimates tens of billions in temporary wealth-tax receipts. [1]

The measure uses January 1, 2026 as the tax-obligation date. [3]

After administration expenditures, 90% of Prop 40 revenue is directed to healthcare. [3]

The independent budget analyst still expects billions

The California Legislative Analyst’s Office estimates that Prop 40 would raise tens of billions of dollars over several years. Its analysis takes account of people trying to reduce their tax bills and the possibility that some wealthy residents leave. The analyst also anticipates an ongoing reduction in income-tax revenue, potentially less than $1 billion a year. Those are different time periods—not two annual numbers to subtract. [1]

The useful point is straightforward: the official analysis does not say that the possibility of departures eliminates the new wealth-tax revenue. It describes a substantial source of temporary funding as well as a separate recurring budget effect. Neither should disappear from the explanation. [1]

A second estimate puts the opportunity at about $100 billion

Jasper Boll, Emmanuel Saez, and Gabriel Zucman estimate approximately $100 billion from the one-time levy in their 2026 working paper, California Billionaires. Their estimate is a research model, not money already collected. Saez discloses an unpaid role advising on the measure’s design and scoring; the paper is not an institutional endorsement by NBER, who published the paper. [2]

Why cite both estimates? Because voters should be able to distinguish the state analyst’s finding from the researchers’ more specific projection. The campaign’s case does not require pretending that they are the same estimate.

The tax is about a defined date—not a moving announcement

Prop 40 sets January 1, 2026 as its tax-obligation date and December 31, 2026 as its valuation date. These do different jobs: the first helps determine who is covered; the second determines when the wealth of those covered individuals is valued. Moving to change residency after the obligation date does not, by itself, remove a person from the measure’s rules. [3]

A new home in another state, a relocated business office, and a change in personal tax residence are not interchangeable facts. California’s existing residency guidance distinguishes a genuine change of residence from a temporary or transitory absence. Individual circumstances still matter. [4]

The revenue has a job to do

After administrative expenses, the measure directs 90% of its revenue to healthcare and 10% to public education and food assistance. Healthcare uses include supporting coverage and providers, and preventing or reducing facility closures and cuts in services. This is not a proposal to collect money without directing how it will be spent. [3]

It also bars using the new money to replace existing state funding for the designated purposes. That matters: the goal is to add protection for care, not announce a new revenue stream while quietly withdrawing another. [3]

What this means for California

A hospital, a clinic, and an insurance program all need resources to serve people. Prop 40 creates a funding option aimed at that need. It does not guarantee a particular hospital will stay open or a specific premium will decrease, but it explicitly directs spending to protect those services and coverage. [3]

Our choice is to use the opportunity to protect care. The fact that an estimate is not a guarantee is a reason to report it honestly—not a reason to treat the funding opportunity as zero.

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The people and institutions behind the evidence

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Sources behind this page

Each reference identifies what it establishes. A cited agency or researcher is not automatically a campaign endorser.

Vote Yes on Prop 40.

Vote Yes on Prop 40. Put the funding opportunity to work for care instead of debating whether billionaires might leave the state.

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