California billionaire tax faces a close vote and competing ballot challenges

November 2, 2026 Last updated 2h ago

A late poll found more likely California voters opposed than supported Proposition 40, a proposed one-time tax on billionaire wealth, as opponents’ advertising overwhelmed supporters’ spending. Tuesday’s vote will decide whether the tax advances, but two competing propositions could still block it, and estimates of its fiscal consequences vary widely.²⁵

TL;DR

The close poll and enormous advertising imbalance show a late-stage contest, but neither establishes how voters will decide Tuesday.²
Even passage would not settle the measure’s fate: Proposition 40 also faces two ballot challenges that could prevent its tax provisions from taking effect.²
Market pricing puts a substantially lower likelihood on Proposition 40 both passing and outpolling both rivals than on passage alone, reflecting the extra electoral test.²^M1^M2

Still to come

California voters decide Tuesday. The result will show whether Proposition 40 wins a majority and whether it receives more affirmative votes than Propositions 41 and 42, the separate measures that could block its tax provisions.

A University of California, Berkeley poll co-sponsored by the Los Angeles Times found 50 percent of likely voters opposed Proposition 40 and 42 percent supported it. The Washington Post reported that opponents had spent $148 million on advertising through Friday, compared with $572,000 for supporters, citing its analysis of AdImpact data. A supporter told the Post that pro-tax advertising was expected to reach about $2 million by Tuesday, while anti-tax spending was also likely to rise.²

Proposition 40 would impose a one-time 5 percent tax on the assets of California residents with at least $1 billion in wealth as of Jan. 1, with 90 percent of the revenue directed to Medi-Cal and the rest to education and food assistance. The measure has divided Democrats: the state party and some unions support it, while Gov. Gavin Newsom opposes it. Propositions 41 and 42 could prevent the tax from taking effect if either receives more affirmative votes than Proposition 40.²³⁴

The economic stakes are sharply disputed. Supporters estimate the tax would raise about $100 billion, while the Hoover Institution puts the revenue at about $30 billion. On possible annual income-tax losses if billionaires leave, a Stanford economist estimated as much as $5.8 billion; a nonpartisan legislative analysis put the likely reduction below $1 billion. Affirm co-founder Max Levchin says the proposal could have a “massive chilling effect,” lead other states to lure California companies and prompt founders to reconsider starting businesses there.²¹

Prediction markets observed on Nov. 2 put the chance of Proposition 40 passing at about 26 percent. The estimate for it passing and receiving more affirmative votes than both competing propositions was about 7 percent, highlighting the additional hurdle posed by the ballot rivals, not just the question of whether the tax wins a majority.²^M1^M2

Sources

Affirm Billionaire Levchin Mulls Leaving California If Wealth Tax Passes · Bloomberg Business · Nov 2
California's mega-rich have outspent foes 250-1 to sink 'billionaire tax' · Washington Post · Nov 2
Billionaire tax divides California Democrats, draws myriad questions · The Hill
California Propositions 40, 41, 42 last-minute guide: The billionaire battle - Los Angeles Times · Los Angeles Times
WSJ: How the Proposed California Billionaire Tax Became a ‘Hot Mess’ for Democrats · Ground News

AI-generated from the linked reporting and prediction-market data. Market prices reflect traders’ expectations and can change.

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