Frequently Asked Questions

A one-time, emergency 5% tax to prevent hospital and emergency room closures and help fund California public K-14 education and state food assistance programs.

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 roughly 200 ultra-wealthy billionaires.

California’s billionaires pay much lower tax rates than what working families pay out of every paycheck. And soon, massive federal healthcare funding cuts will collapse key parts of the California healthcare system. Local hospitals and emergency rooms will shut their doors forever because billionaires insist on paying less than the rest of us. That’s why California voters will be voting YES on the billionaire tax to ensure billionaires pay their fair share.

All Californians, including:

• Patients who rely on hospitals, clinics, ERs, nursing homes, and home care
• Families facing rising insurance premiums and reduced access to care
• Small businesses facing rising insurance costs 
• 145,000 healthcare workers whose jobs are at risk
• Students and families through protected K–14 public education funding

• SNAP/CalFresh recipients, school-based nutrition program enrollees, and community food-assistance effort beneficiaries

The federal budget cuts about $100 billion from California healthcare over the next five years to pay for tax cuts for the ultra-wealthy. The cuts are so massive, they’ll collapse key parts of the California healthcare system. Local hospitals and emergency rooms will shut their doors forever if billionaires don’t finally chip in and pay their fair share.

Public data already exists, and Forbes currently estimates there are roughly 204 California billionaires. Once the Billionaire Tax Act is passed this November, individuals above the threshold $1 billion will be required to file a net-worth declaration with their 2026 state tax return.

No. The tax applies to billionaires who were California residents as of January 1, 2026, regardless of how many offices they open or mansions they buy in other states. 

The overwhelming majority of billionaires in the state appear to have stayed, and the myth of billionaires fleeing California has collapsed.

Evidence from Massachusetts and Washington show that taxes on the super-wealthy raise substantial revenue without driving away wealth. In both states, the number of very wealthy residents and their cumulative wealth continued to grow after taxes took effect. 

For example, When Massachusetts voters approved a 4% surtax on incomes above $1 million in 2022, opponents warned millionaires would flee the state. A recent report found that from 2022 to 2024, the number of residents with net worth over $1 million rose by 38.6%.

No, just the opposite. The billionaire tax will save jobs – including an estimated 145,000 healthcare jobs. In addition, the initiative will also save jobs in countless other industries by protecting millions of California small businesses from skyrocketing healthcare premiums.

California’s billionaires pay much lower tax rates than what working families pay out of every paycheck.

This ballot measure focuses on worldwide wealth of billionaires that would otherwise never be taxed because it’s the fastest way to raise the revenue needed to avert a complete healthcare collapse – and protect working families and regular taxpayers from being stuck with the bill.  

In addition, for most billionaires, the impact of this tax is barely noticeable: California billionaires have increased their wealth 158% over the last three years, making a 5% tax, spread over five years, truly negligible relative to their enormous gains.

The initiative uses standard valuation methods already applied in federal estate and tax law. These are well-established and routinely enforced by the state of California.

The state Franchise Tax Board will be responsible for applying and enforcing the tax, just like all other California taxes.

• Signature gathering began in January
• Secretary of State verifies that ballot measure qualifies for the ballot in June 
• Initiative takes effect upon voter approval in November 
• Wealth valuation date: December 31, 2026

No. Prop 40 provides a dollar-for-dollar stopgap against the $100 billion in federal healthcare cuts that will force local hospitals and emergency rooms to close their doors forever if billionaires don’t finally pay their fair share.

No. This is a citizen ballot initiative that has the support of more than 120,000 frontline healthcare workers, over 5,000 volunteers, and hundreds of community allies, labor leaders, and elected officials across the state. We are all dedicated to preventing a healthcare collapse, and keeping our hospitals and emergency rooms open. Together, we can protect hospitals and emergency rooms from shutting their doors forever by voting YES to make billionaires pay their fair share.

No, but the federal budget sure is. It funds even more tax breaks for billionaires, eliminates health insurance for over a million Californians, doubles premiums for millions more, and cuts funding for food aid and public education. Everyone needs healthcare they can count on, and no one benefits from a closed hospital or ER when they have a healthcare emergency.

We’re confident this ballot measure is legal and will be upheld. 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 1913 enactment of the federal income tax (another retroactive tax). Recent California tax ballot measures, like Prop 30, are also retroactive to the start of the year. 

And even if the billionaire tax is challenged in court, billionaires will still need to pay the tax while the issue is pending in court. 

No, it’s not. Under the Prop 40, 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 specified in the Act. For other kinds of assets – like investments in privately-held businesses or sole proprietorships – the Act provides special valuation rules, as well as the option to submit an independent appraisal. 

False claims circulating about the control or voting shares of CEOs or founders are fear-mongering and misrepresent what this initiative does. For an in-depth de-bunking of this misinformation, see this report.. What’s more, these claims distract from the real issue Californians are facing right now: a looming healthcare crisis that requires billionaires to pay closer to their fair share.

The real threat to California’s economy is that billionaires pay much lower tax rates than what working families pay out of every paycheck. Healthcare costs are skyrocketing, and hospitals and emergency rooms could shut their doors forever – all because billionaires insist on paying less than the rest of us.