Billionaire tax: how a union leader’s ‘crazy’ idea became the defining issue of California’s midterms
California voters will decide in the midterms whether to impose a one-time 5% tax on billionaires, with the money intended to support healthcare, education and food assistance. The proposal, Proposition 40, began as a union-led response to federal healthcare cuts and has become a major political battle, drawing national attention and highlighting debate over wealth inequality.
The measure would apply to billionaires living in California on 1 January 2026. Opponents, including wealthy technology figures, have spent more than $356m through political committees to defeat it; in the first two weeks of October alone, opposition spending exceeded $42.8m. Supporters, including union leader Dave Regan, argue the tax could help address coverage losses projected from federal cuts, while critics question its one-off structure and limits on how the funds can be used.
In short
- California is voting on a one-time 5% tax on billionaires.
- Proposition 40 would fund healthcare and some education and food assistance.
- Opponents have spent more than $356m fighting the measure.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Supporters argue that a one-time levy on the state’s billionaires could raise substantial funds for healthcare, education and food assistance as federal cuts threaten services. They see asking those with the greatest ability to pay to help meet urgent needs as a fair response to rising wealth inequality and a way to protect Californians who may lose coverage.
The case against
Opponents can accept that healthcare and other services need funding while arguing that a one-off tax is an unreliable way to support ongoing needs. They may also worry that taxing residents’ wealth could encourage people or businesses to leave California, weakening future revenues and investment, and question whether the measure’s restrictions would let funds address the most pressing needs effectively.
Explained simply
California uses ballot propositions to let voters decide directly on proposed laws and tax changes. A one-time wealth tax would be unusual: it would charge people based on the value of their assets, rather than their annual income. The union-led proposal was developed amid concern about federal healthcare cuts and their possible effects on public services.
Dave Regan, a California union leader, is among the measure’s supporters; wealthy technology figures are among its opponents. The debate centres on whether a tax on billionaires could help fund healthcare, education and food assistance, and on concerns about how a one-off tax would work and how its revenue could be spent.
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