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Healthcare is among voters’ top concerns in the midterm elections, but a California ballot measure to tax the state’s billionaires to pay for it is dividing the electorate.
The first-in-the nation wealth tax proposal takes aim at the ultrarich in the nation’s wealthiest state to help offset steep federal cuts to healthcare, food assistance, and education.
If enacted, roughly 200 of the 39.6 million people who call California home would be subject to the one-time 5% tax.
“These people who are making all this money, they can never spend it all. What are they going to do, buy another house in the Hamptons, buy another jet? They don’t need that,” Steve Erler, a Pasadena resident, said while out walking his dog in August. “They need to be able to say when they go to bed at night, ‘I helped a child with healthcare. I helped a senior get fed.’ That’s what’s important.”
Put on the ballot by one of California’s largest healthcare unions, Proposition 40 would tax the net worth of billionaires, including most of their stock holdings, yachts, and artwork.
But it’s not clear exactly how the revenue raised will be spent if voters approve the measure. It directs lawmakers to spend the bulk of the money on healthcare but leaves the details up to them.
“I’m not sure that you can say, with full security, that this will stop clinics from being closed or healthcare workers from being laid off, or people from losing their healthcare,” said Chris Hoene, executive director of the California Budget & Policy Center, a left-leaning nonprofit.
Community health centers, doctors, and other healthcare entities that might benefit from such a cash infusion argue that the ballot measure won’t make up for the estimated $30 billion a year in federal cuts to the state’s Medicaid program from the GOP’s One Big Beautiful Bill Act.
René Bravo, a pediatrician in San Luis Obispo County and the president of the California Medical Association, said that any billionaire tax revenue “is going to run out” and that lawmakers should instead “work on a more sustainable, durable funding mechanism” for the state’s Medicaid program.
Polls show California voters appear torn over departing billionaires. Pasadena resident Lynne Wines, a 72-year-old retired banker, worries that wealthy investors will flee the state over fears that the tax will be repeated.
“Taxes have a way of being needed over and over, and politicians have a way of finding those needs,” Wines said. “So, I don’t really feel secure that this is just a one-time thing.”
Already several Democratic states, including Hawai‘i, Maine, Massachusetts, and Rhode Island, have approved millionaire taxes, but those have been limited to income, not overall wealth. Voters in Washington state will decide this fall whether to keep their millionaire tax.
An initiative on the California ballot would levy the nation’s first wealth tax on billionaires. Supporters say the proceeds would help offset President Donald Trump’s sweeping healthcare cuts. But critics argue that the temporary infusion of cash is a giveaway to politicians.
