CALIFORNIA — Proposition 40, a ballot measure coming up for a vote in November, would impose a one-time 5% tax on the wealth of Californians worth more than $1 billion. Experts estimate Proposition 40 will raise $100 billion for California over five years if passed.

The initiative aims to fund healthcare and education, with 90% of the revenue from Proposition 40 earmarked for health care. The remaining revenue from Proposition 40 is earmarked for food assistance and education. The measure would apply to approximately 200 California billionaires.

Google co-founder Sergey Brin has contributed $102 million to oppose the billionaire tax. Building a Better California raised $118 million through June, with Sergey Brin accounting for $82 million of Building a Better California's funds as of June. Venture capitalist John Doerr contributed $10 million to Building a Better California, while Michael Moritz contributed $7.5 million to the campaign.

Chris Larsen contributed an extra $10 million to Building a Better California, and John Hering contributed $946,000. Neil Mehta contributed $250,000 to the opposition effort.

The California Democratic Party endorsed Proposition 40 at its executive board meeting in San Diego two weeks ago. The party also opposed Propositions 41 and 42. If either Proposition 41 or Proposition 42 receives more votes than Proposition 40, they would cancel out the billionaire tax even if the billionaire tax is also approved. California Governor Gavin Newsom opposes the billionaire tax ballot measure, and Xavier Becerra opposes the billionaire tax ballot measure.

A UC Berkeley Institute of Governmental Studies poll of more than 4,000 registered voters found that 48% of likely voters support the billionaire tax measure. The same poll found that 41% of likely voters oppose the billionaire tax measure. In the UC Berkeley poll, 50% of unaffiliated voters said they would support the billionaire tax, while 80% of Republicans said they would not support the billionaire tax. In the UC Berkeley poll, 72% of voters had heard of the billionaire tax, but fewer than one-third of voters were aware of Propositions 41 and 42.

Mark Cuban wrote on X, "IMO, if this passes, only idiot startup founders stay in Cali." Emmanuel Saez, director of UC Berkeley’s James M. and Cathleen D. Stone Center on Wealth and Income Inequality, said founders without immediate money to pay the tax can "use a deferral option," paying 5% of "whatever proceeds they take out of their business (as dividends or sales of stock) moving forward." Saez added, "If the business fails, they won’t have to pay anything." U.S. Representative Ro Khanna wrote on X, "The government would still collect from the vast majority of billionaires who are not illiquid." Eric Schickler, co-director of the Institute of Governmental Studies, said, "These results suggest that the Billionaires Tax initiative is shaping up to be a closely fought contest, with the key question being whether opponents can make big enough inroads among the state’s traditionally Democratic-leaning voters."

California attracted $366 billion in venture capital funding so far this year. California's $366 billion in venture capital represents approximately 90% of all venture capital raised in the U.S. so far this year. The state attracted three times more venture funding this year than every other state combined.

New York's $27 billion in venture capital is one-thirteenth of the amount attracted by California. Additionally, 86 cents of every dollar of venture capital raised in California went to artificial intelligence companies.

The California Department of Finance projected a $12.6 billion deficit for the current fiscal year in June forecasts. Updated predictions suggest California will end the current fiscal year with a $4.5 billion surplus. There are 14 statewide measures on California’s November 3 ballot. Proposition 40, also known as the California billionaire tax or California wealth tax, is a combined initiated constitutional amendment and state statute that will appear on the November 3, 2026, ballot in the state of California.

Timeline

In 2025, California's economy grew 5% last year to reach $4.25 trillion. In January 2026, four of the top 25 companies that raised the largest venture capital funding in 2026 were based in Southern California. Also in January 2026, Anduril Industries, Shield AI, Atoms, and Valar Atomics were the four Southern California-based companies among the top 25 venture capital fundraisers in 2026.

By June 30, 2026, Sergey Brin accounted for $82 million of Building a Better California's funds as of June, and Building a Better California raised $118 million through June.

In August 2026, Sergey Brin contributed an additional $20 million to oppose the billionaire tax earlier this month. On August 7, 2026, the California Democratic Party's endorsement of Proposition 40 occurred at its executive board meeting in San Diego two weeks ago.

What's New

Additional reporting indicates that Sergey Brin accounted for $82 million of Building a Better California's funds as of June. It was also reported that Proposition 40 would apply to approximately 200 California billionaires. Building a Better California has reserved nearly $87 million of advertising time across California for TV commercials ahead of the November election. The California Democratic Party endorsed Proposition 40.

Emmanuel Saez said founders without immediate money to pay the tax can "use a deferral option," paying 5% of "whatever proceeds they take out of their business (as dividends or sales of stock) moving forward." Saez also said, "If the business succeeds, they’ll have to pay 5% of that success eventually." Ro Khanna wrote on X, "The government would still collect from the vast majority of billionaires who are not illiquid." Eric Schickler said, "These results suggest that the Billionaires Tax initiative is shaping up to be a closely fought contest, with the key question being whether opponents can make big enough inroads among the state’s traditionally Democratic-leaning voters."

Why It Matters

Proposition 40 represents a potential shift in state revenue generation, with experts estimating it could raise $100 billion over five years. The measure targets approximately 200 billionaires in a state that already attracts 90% of all U.S. venture capital, showing the tension between taxing extreme wealth and maintaining a favorable environment for tech and startup growth. The outcome will determine funding allocations for healthcare, education, and food assistance, sectors that have faced budgetary pressures as reflected in the state's shifting fiscal projections from a projected deficit to a surplus.

The contest is further complicated by the presence of competing ballot measures, Propositions 41 and 42, which could nullify the tax even if it passes. With major figures like Sergey Brin contributing heavily to opposition efforts and the California Democratic Party endorsing the measure, the election outcome hinges on voter awareness and partisan alignment. Polling data shows a narrow lead for the measure among likely voters, but low awareness of the competing propositions suggests the final result may depend on late-breaking information campaigns.