California voters will decide next month whether to impose a much-debated one-time tax on the state’s billionaires, but approving the controversial measure may not be enough for it to become law. Proposition 40, informally known as the Billionaire Tax Act, would impose a one-time 5 percent tax on Californians with more than $1 billion in assets, including shares of capital stock, bonds or other evidence of indebtedness, and any legal or equitable interest. The measure, which would work retroactively and apply to taxpayers residing in the state as of January 1, 2026, would potentially impact hundreds of locally based billionaires.
According to supporters, the ballot initiative has the potential to raise about $100 billion over five years if passed, with the money earmarked primarily for healthcare and other public programs. But the tax has plenty of opponents, even in the state’s liberal ranks, as some California Democrats are afraid of alienating wealthy tech donors who have been propping up their campaigns over the past decade or so. Among the most prominent opponents to Proposition 40 are Governor Gavin Newsom and gubernatorial candidates Xavier Becerra, a Democrat, and Steve Hilton, a Republican.
The ballot initiative is sponsored by the labor union SEIU United Healthcare Workers West and counts independent Vermont Senator Bernie Sanders, Democratic California Representative Ro Khanna and the Democratic Party of California among its most vocal supporters. Ultimately, it will not just be down to a battle between the "Yes on Prop 40" and the "No on Prop 40" teams. Even if the measure obtains a majority support by California voters, two other initiatives on the ballot could leave the billionaire tax dead in the water.
Newsweek contacted Newsom’s office, the Democratic Party of California, SEIU United Healthcare Workers West and Building a Better California for comment by email on Tuesday morning. On November 3, voters will also decide on Proposition 42 and Proposition 41, competing measures that could prevent Proposition 40 from taking effect. Under the ballot rules, Proposition 40 would be nullified if Proposition 42, or another competing measure, Proposition 41, receives more votes.
On the other hand, Proposition 40 also contains a competing-measure provision that would nullify Propositions 41 and 42 if it receives more votes. Propositions 41 and 42 are sponsored by Building a Better California, a group established by Google co-founder Sergey Brin and former Google CEO Eric Schmidt. Brin, a centibillionaire, has an estimated net worth of $26.57 billion, according to Forbes, and boasts three multimillion-dollar homes in California in his real estate portfolio.
Schmidt’s net worth is estimated at $39 billion. With his wife, he owns a $100 million manor in Holmby Hills, Los Angeles. Proposition 41 would essentially limit the state’s ability to introduce new taxes.
Extract — continue reading at the source.
