I have been profoundly ambivalent about Proposition 40, the 5% tax on the net worth of California’s 250 or so billionaires, for months. There’s so much to dislike about it.
It’s a one-time tax paid out over five years to address an ongoing issue – specifically cuts to federal healthcare spending contained in President Trump’s One Big Beautiful Bill Act.
It is a self-serving measure by the Service Employees International Union-United Healthcare Workers West, a union that has a problematic history of abusing California’s citizen-initiative process to shake down the healthcare companies it is trying to organize. That includes another stinker on the Nov. 3 ballot, Proposition 44, which would force community healthcare clinics to spend money in a way that could result in service cuts and even closures.
Support our election coverage. Golden State's reporting and analysis on all 14 propositions on the Nov. 3 ballot is free to read, but not to produce. You can help us by making a tax-deductible gift. It's the smartest donation you can make this election cycle.
It ignores equally pressing state funding needs, which is why the California Teachers Association and other labor unions are opposing it.
Though it is projected to bring in $100 billion, it could ultimately cost the state more if it chases away wealthy innovators. California’s budget relies heavily on income tax revenue from top earners, which is why high-profile Democrats such as Gov. Gavin Newsom and his likely successor, Xavier Becerra, are opposed (though the state party itself has endorsed the tax).
It would set up healthcare programs for a disastrous trip off a financial cliff five years later, after the last of the revenue peters out. That’s why the board of Planned Parenthood opposes it (though its workers don’t all agree).
And Proposition 40 may not bring in a single dollar to state coffers anytime soon, if ever. If it wins a majority in next week’s election and somehow gets more votes than both of the other two poison-pill measures on the ballot, it will be tied up in litigation for years. Don’t expect the billionaires who dropped more than $290 million trying to stop it to give up after Election Day. Among the likely legal arguments is that the retroactive tax is unconstitutional.
That’s a powerful collection of reasons to vote against Proposition 40. But I voted for it anyway.
Golden State staff
The reason is simple: To send a message of deep-seated frustration and outrage.
Specifically, I am appalled by the growing wealth inequality in the county. I am infuriated that the political system has been completely hijacked by obscenely wealthy people who want to hoard their riches and power while average workers fall farther and farther behind.
And like so many Americans, I am virtually powerless to stop the inexorable march of AI pushed by many of these billionaires who evince little concern of its profound implications for our democracy, environment and future human existence.
But now, by rare chance, I have a lever I can pull, figuratively, to register my deep discontent.
Mariel Garza
I agree with my former Los Angeles Times colleague Jon Healey that there are better ways to tax billionaires. They just don’t happen to be on the table. Newsom argues that a national billionaire tax would make more sense. It would. But I have no faith that such a proposal could make it out of Congress so long as its members and the president depend on the largess of wealthy people to win elections.
Proposition 40 won't do much to reduce the power the state's billionaires wield in Sacramento or Washington, D.C. It won't even knock them out of the ultrarich category. Their wealth has been growing at a much higher annual rate than 5%. So you have to ask yourself why Sergey Brin, the Google co-founder who moved out of California when the tax was just a proposal, is still concerned enough to spend more than $100 million of his own money trying to stop the measure.
My guess is he suspects Proposition 40’s victory would be the spark that ignites the smoldering anti-billionaire sentiment and lead to a spate of wealth tax measures across the nation. It could even give state and federal lawmakers an incentive to curb their benefactors’ political power.
To me, that possibility trumps all of the rational, reasonable arguments against Proposition 40.
Golden State staff
