California’s Prop. 40 Could Be Blocked Despite Winning a Majority

California’s proposed one-time billionaire tax could fail even if it wins a majority on Nov. 3, because two competing ballot measures could give courts grounds to block it.

A court could block Proposition 40 if it finds a conflict and either Proposition 41 or Proposition 42 receives more yes votes than Proposition 40.

The tax would cover eligible wealth held by people who were California residents on Jan. 1, 2026. Eligible assets would be valued as of Dec. 31, 2026, with payment due in 2027. Taxpayers could spread payments over five years, while owing an annual 7.5% charge on the unpaid balance.

Covered personal wealth includes businesses, securities, art, collectibles and intellectual property. The measure excludes real property and some pensions and retirement accounts. It broadly addresses tangible and intangible personal wealth but does not expressly name cryptocurrency.

Once administrative costs are paid, the measure would direct nine-tenths of its proceeds to health care, with the remainder supporting education-related programs and food assistance. The revenue could not replace existing state funding for those purposes.

Estimates of the tax’s yield vary. One projection puts revenue at about $100 billion from 2027 through 2031, based on October 2025 wealth estimates and an assumption that avoidance and evasion reduce the potential tax base by 10%. Another estimate points to a temporary increase of tens of billions of dollars over several years. Changing stock prices and taxpayer responses add uncertainty, while the measure could also reduce annual state income-tax collections from billionaires by less than $1 billion.

Among 4,512 likely voters surveyed Sept. 15-20, 45% favored the measure, 42% opposed it and 13% were undecided. In the Sept. 4-10 survey, support led opposition 52% to 46% among 1,103 likely voters.

The proposal also faces an opposition campaign backed by $300 million. California voters will decide on Proposition 40 and the competing measures on Nov. 3.