Imposes One-Time Tax on Certain Taxpayers. Initiative Constitutional Amendment and Statute.

“It will raise about $100 billion to replace the funding Trump and his billionaire donors took from working people to line their pockets.”

Seen in: Official Voter Information Guide, argument in favor of Proposition 40

The $100 billion figure is the measure authors' own estimate: their expert report says the tax is expected to raise about $100 billion over five years (2027-2031), after assuming 10 percent of the base is lost to avoidance and evasion. The Analyst gives no point estimate; it says the state "probably would collect tens of billions of dollars" spread over several years and that exactly when and how much is "very hard to predict". A Hoover Institution study estimates about $40 billion in wealth tax revenue. The Analyst also estimates a possible ongoing loss of less than $1 billion a year in state income tax revenue. The claim about who caused the federal funding cuts is outside the Analyst's scope and was not checked.

“Prop. 40 enacts a one-time tax paid ONLY by Californians worth more than $1 billion”

Seen in: Official Voter Information Guide, argument in favor of Proposition 40

The Attorney General's summary describes a one-time tax of up to 5 percent on certain taxpayers with covered assets valued over $1 billion. The Analyst says billionaires who were California residents on January 1, 2026 would pay a one-time state tax equal to 5 percent of their net worth, due in 2027, payable over five years at extra cost. Context: the tax rests on residency on January 1, 2026, and the FPPC list calls the measure a tax on "certain individuals and trusts".

“Prop. 40 makes approximately 200 California billionaires pay a modest, one-time tax on their global wealth”

Seen in: Official Voter Information Guide, argument in favor of Proposition 40

The Analyst says California is home to "a few hundred people with net worth over $1 billion" and describes a one-time tax of 5 percent of net worth. The measure authors' expert report gives both figures: it counts 250 California billionaires on the Forbes list (and refers to the 250 wealthiest Californian taxpayers), and its FAQ calls the tax one on "the 200 or so richest Californians". "Approximately 200" is within the range the Analyst and the report give. The text of Proposition 40 defines net worth as the total value of all assets and property interests of the taxpayer and spouse "worldwide", so "global wealth" matches the text; real property held directly or through a revocable trust and qualified pensions and individual retirement arrangements are excluded. "One-time" matches the Analyst's description. "Modest" is the authors' characterization and is not graded here.

“A study by Stanford University economists found the tax will cost California $25 billion as the tax drives companies and wealthy residents out-of-state.”

Seen in: Official Voter Information Guide, argument against Proposition 40

The study exists: the Hoover Institution at Stanford (Rauh, Jaros, Kearney, and others) estimated that the one-time tax would collect about $40 billion and, once lost future income tax revenue from billionaires who leave is counted, leave the state about $25 billion worse off, with a negative net present value under most scenarios. The $25 billion is a projection from the study's assumptions, including that departures already announced removed a large share of the tax base, not a certain result. The Analyst reaches a different estimate: tens of billions of dollars collected and a possible ongoing income tax loss of less than $1 billion a year, with the outcome very hard to predict.

“Prop. 40 would be the first in California history to tax retirement accounts—a dangerous precedent.”

Seen in: Official Voter Information Guide, argument against Proposition 40

The Attorney General's summary says covered assets exclude real property and "some pensions and retirement accounts"; the Analyst says they "generally would be excluded". The text of Proposition 40 exempts qualified pensions and individual retirement arrangements, and Roth-type retirement accounts except to the extent the aggregate value in all of them exceeds $10 million. So most retirement accounts are excluded, but Roth-type amounts above $10 million would be counted. Whether this would be the first California tax on retirement accounts is not addressed in the guide.

“Exempts itself from voter-approved constitutional protections for schools, shortchanging classrooms over $3 billion annually.”

Seen in: Official Voter Information Guide, argument against Proposition 40

The Attorney General's summary says revenues from the tax are exempt from constitutional requirements for school funding, budget reserves, and the state spending limit, and the Analyst says existing constitutional rules that require a certain amount of spending on schools and community colleges would not apply to this money. The $3 billion a year figure is not in the guide's analysis. Whether revenues from the tax would otherwise have counted toward the school minimum is not explained there.