California Voters Should Tax Billionaires, Even If a Few Move Away

State analysts put the yearly cost of billionaires leaving under $1 billion. The one-time tax would raise tens of billions.

California's likely voters are split almost evenly on taxing billionaires. I think the side gaining ground is selling a fear that the state's own budget analysts have already priced. Vote yes on Proposition 40.

Start with the poll. A UC Berkeley Institute of Governmental Studies survey, co-sponsored by the Los Angeles Times, found 45% of likely voters backing the one-time 5% tax on billionaires' assets. Another 42% oppose it, and 13% haven't decided, the Times reported. Six weeks earlier, the same pollsters had it at 48 to 41. The survey reached 4,512 likely voters from Sept. 15 to 20, and its margin of error is about 2 points.

Between those two polls, nearly $100 million went into TV ads, social posts and mailers. Most of it came from opponents, the outlet reported.

So look at what the money is fighting. A healthcare union wrote the measure after Congress passed, and President Trump signed, cuts that the Times says could cost California about $100 billion in federal healthcare funding. The paper reports that millions of Californians could lose Medi-Cal and rural hospitals could close. Ninety percent of Prop 40's revenue would go to healthcare. The rest would go to schools and food aid.

The case against it is serious, and it has serious people behind it. Gov. Gavin Newsom opposes the tax because he worries it could hurt the state's finances over time. Both men running to replace him, Democrat Xavier Becerra and Republican Steve Hilton, oppose it too. Their argument runs like this. California's budget already leans on a small group of very rich people. Most of their wealth is stock, and stock prices swing. Some billionaires have already left the state. Every one who leaves takes his income taxes with him.

The Legislative Analyst's Office, whose analysis runs in the official voter guide, doesn't wave that away. It calls the timing and size of the haul "very hard to predict," partly because it can't know how billionaires will try to dodge the bill. But it went ahead and priced the flight anyway. Billionaires leaving or reshuffling their income "probably would reduce state revenues by less than $1 billion per year," the analysts wrote. Against that, the state "probably would collect tens of billions of dollars" from the tax, spread over several years.

That's the trade.

Nobody knows the exact haul. The analysts won't guess, and I won't either. Their range is still lopsided. The cost of running the tax, which the office puts at tens of millions a year for several years, comes out of the new money.

The best point against my view is that a one-time windfall can't fill a hole that keeps coming back, while a lost income tax is a cost that could keep coming back too. That point bothered me until I looked at the date. The tax reaches back to billionaires who lived here on Jan. 1, the Times reported, which is why some moved before it. A billionaire who packs up after that date still owes. The fleeing already happened, and the analysts' number already includes it.

Look at what these same voters will accept. The poll shows much stronger support for Proposition 3, which would make permanent a 2012 tax on people earning at least $360,000. That tax takes 10.3% of income above that line and 12.3% above $721,000, every year, from far more people. Voters are fine taxing high earners forever, yet they're wavering on a single bill for billionaires. That gap is what the ads bought.

Opponents know a no vote on 40 may not be enough. They've raised $144 million for Propositions 41 and 42. Either one would cancel the billionaire tax if it gets more votes than 40 does. Proposition 42 leads, 43% to 34%. If you vote yes on 40, vote no on both.

Ballots start landing in the mailboxes of 23.2 million California voters within days. When yours comes, find the analysts' fiscal section on Prop 40 in the voter guide, and read it before the next mailer.

Source: latimes.com, retrieved September 26, 2026.