California’s billionaire tax trails as ballot counting continues

California’s proposed one-time tax on billionaires trailed in preliminary returns Thursday. About 55% of ballots counted on Proposition 40 were against it in KQED’s 6:58 p.m. Pacific update on Nov. 5. The Associated Press estimated that about 64% of the vote had been counted.

What Proposition 40 would collect

The measure would levy a 5% tax on the net worth of billionaires who lived in California on Jan. 1, 2026, with exclusions for assets such as most real estate and retirement accounts. The tax would come due in 2027, and taxpayers could pay over five years at a higher total cost. The state would have to direct 90% of the proceeds to health care, with the rest for education, food assistance and administration.

The health care workers’ union that backed the measure argued that it would help cover losses in federal health funding. Opponents said the one-time tax could prompt wealthy residents to leave and reduce the state’s recurring income tax receipts. California’s Legislative Analyst’s Office estimated the measure would raise tens of billions of dollars over several years and could lead to an ongoing income tax revenue decline likely below $1 billion a year.

Two other tax measures are on the same ballot

Proposition 41, which would require audits for certain taxes and limit the state’s ability to exclude some tax revenue from its spending cap, was trailing. Proposition 42, which would restrict new taxes on personal assets and certain retroactive taxes, led with about 53% of the votes counted. If Proposition 40 and a competing measure both pass, the competing measure could block the tax if it gets more yes votes and a court finds the provisions conflict, according to the legislative analyst.

Counties can still receive eligible mail ballots through Nov. 10 if they were postmarked by Election Day. California’s secretary of state is scheduled to certify the statewide results on Dec. 11.