Know Before You Vote: Propositions 40, 41, 42
By Engage Tuolumne
Published: September 18, 2026
Last updated: September 17, 2026
Your Guide to California’s November 3 Ballot Propositions
Register to vote or check your registration status (address, party affiliation, or name) at this link: https://registertovote.ca.gov/.
This is the fourth in a series of articles on the 14 propositions appearing on the November 3 ballot. The entire series is under the Election Watch tab on our website.
Proposition 40: Imposes One-Time Tax on Certain Taxpayers. Initiative Constitutional Amendment and Statute.
What it does
- Imposes a one-time wealth tax on billionaires of up to five percent of covered assets, including their businesses, securities, art, collectibles, and intellectual property, but excluding real property and some pensions and retirement accounts.
- Provides a temporary revenue increase of up to $100 billion spread over several years.
- Allocates 90 percent of these tax revenues for health care,10 percent for food assistance and education-related programs, as well as the cost of administering the wealth tax.
- Exempts such tax revenues from constitutional requirements for school funding, budget reserves, and the state spending limit.
- Will not replace existing funding for health care, food assistance, and educational programs.
What it doesn’t do
- Will not include real estate or most pensions and retirement accounts.
- Will not impose any extra tax on non-billionaires.
- Won’t guarantee that California billionaires would not move out of state.
- Won’t apply the wealth tax to a billionaire who moved out of California before January 2026.
Arguments in favor
- Requires billionaires (who often pay less than their fair share of taxes) to contribute to state funding for low-income residents at risk of losing health care.
- Levies a one-time five percent tax on the accumulated wealth of taxpayers and trusts with covered assets valued over $1 billion to fund state health care programs, food assistance programs, and education programs.
- The five percent one-time tax will be levied on billionaires’ assets, generally excluding retirement accounts and pensions.
- The State will receive tens of billions of dollars for health care, food assistance, and education-related programs for low-income residents.
A YES vote means
Arguments against
- Since the legislature can amend this proposition, it could expand the tax to everyone.
- Long-term growth is at risk because billionaires might leave the state.
- Some progressive groups, like Planned Parenthood, feel it is poorly written and will succumb to court challenges.
- There will be no one-time tax on California billionaires.
A NO vote means
Who supports it
- Service Employees International Union-United Healthcare Workers West
- Vermont Senator Bernie Sanders
- Teamsters California
- AFSCME California
- California Democratic Party
Who opposes it
- Crypto Executive Chris Larsen
- Venture Capitalist Ron Conway
- California Business Roundtable
- California Medical Association
- California Teachers Association
- Planned Parenthood
- California Professional Firefighters
- State Building and Construction Trades
- Governor Gavin Newsom
PROPOSITION 41: Prohibits New State Taxes That Exclude Revenues from State Spending Limit. Requires Audits for New State Special Taxes. Initiative Constitutional Amendment.
What it does
- Prohibits any new state taxes that exclude their revenues from the state spending limit approved by voters in 1979, viz. Prop 40’s billionaires’ tax.
- Requires a pre-election audit of programs that would receive funding from a voter-proposed special tax and recurring audits of programs funded by special taxes enacted after January 1, 2026.
- Intends to nullify Prop 40 if measure receives more “yes” votes than Prop 40.
What it doesn’t do
- Implement any taxes.
- Affect the passage or elements of Proposition 40, the so-called “wealth tax.”
Arguments in favor
- Requires more accountability, transparency, and trackable progress of tax-funded programs.
- Places audit requirements on new state special taxes in the future, offering better oversight.
- If Proposition 41 receives more “yes” votes than Proposition 40 on this same ballot, then Proposition 40, even with a majority of “yes” votes, could be stopped from becoming law because the courts could find that Proposition 41 conflicts with Proposition 40.
- Any future tax initiative on the ballot must undergo an audit prior to the election and ongoing audits if the initiative passes.
- Any new taxes levied by the initiative process cannot be excluded from the voter-approved state spending limit.
A YES vote means
Arguments against
- Designed specifically to nullify Proposition 40.
- Places cumbersome and expensive requirements of pre-election audits on programs that would receive funding from a tax measure; the tax measure may not pass, and the time and money spent on the pre-election audit would have been wasted.
- Billionaires are funding Prop 41. Supporters have donated over $58 million.
- There will be no requirement for pre-election audits for future tax initiatives.
- There will be no interaction with Prop 40 which will prevail if it wins a majority of votes.
- New state taxes, such as the one-time billionaires’ tax, could be excluded from the state spending limit.
A NO vote means
Who supports it
- Sergey Brin, billionaire Google Co-founder
- Californians for a More Transparent and Effective Government
- Robert Gutierrez, California Taxpayers Association
- Building a Better California
- Stewart Resnick, Chairman and CEO of Wonderful Company Foods
- Reform California, Carl DeMaio
Who opposes it
- SEIU-United Healthcare Workers West
- California Democratic Party
PROPOSITION 42: Prohibit the Enactment of New Taxes After January 1, 2026 on Ownership or Accumulation of Retirement Holdings, Individually Owned Assets, and Other Forms of Personal Savings. Initiative Constitutional Amendment.
What it does
- Prohibits taxes on billionaires’ personal property and financial assets like investment accounts and retirement accounts which currently are only taxed when sold. This would make it impossible to establish a wealth tax.
- Restricts the imposition of retroactive taxes.
- May nullify Proposition 40, the wealth tax on billionaires’ assets.
What it doesn’t do
- Will not implement any taxes.
- Will not tax the retirement accounts or personal savings of anyone who is not a billionaire as of January 1, 2026.
Arguments in favor
- Unrealized gains (art that hasn’t been sold, retirement accounts that haven’t been withdrawn, investments that haven’t been sold) would be unfairly taxed and would set a precedent for taxing the assets of all Californians, regardless of their finances.
- No billionaires will be subject to taxes on their assets. There will be no one-time “wealth tax.”
- Prohibits retroactive taxes on billionaire status that occurred prior to January 1, 2026.
- It could nullify Prop 40.
A YES vote means
Arguments against
- Designed specifically to nullify Proposition 40.
- Intended to trick voters into believing that average earners will also be subject to taxes on their modest assets, thereby letting billionaires off the hook.
- $59 million has been spent, mostly by billionaires, to support it.
- Billionaires could have a one-time five percent tax on their assets if Prop 40 passes with the State realizing up to a $100 billion windfall for citizens’ health care.
A NO vote means
Who supports it
- Sergey Brin, billionaire Google Co-founder
- Protect Retirement and Life Savings
- Building a Better California
- California Taxpayers Association
- California Small Business Association
- Reform California
- Peace Officers Research Association of California
Who opposes it
- SEIU-United Healthcare Workers West
- California Democratic Party
Sources
- “Proposition 40. Analysis of Measure,” Legislative Analyst’s Office.
- “List of California Ballot Propositions,” Ballotpedia.
- “2026 Voter Guide: New Propositions,” (see Propositions tab), CalMatters.
- Joe Garofoli, “Why Planned Parenthood Opposes the California Billionaire Tax,” San Francisco Chronicle, July 9, 2026.