The billionaire tax on the California ballot has triggered propositions intended to undermine it. This guide should clear up voter confusion about the five propositions dealing with taxes on the Nov. 3 ballot. (GV Wire Composite/Paul Marshall)
- The billionaire tax on the California ballot has triggered competing tax propositions intended to undermine it.
- Learn exactly what Props. 40, 41, and 42 would do, and how they impact each other.
- Prop. 3 makes high earner tax permanent, and Prop. 43 raises bar for special local taxes to 66.66%.
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The first law of life is that nothing is certain except death and taxes.
Sir Isaac Newton’s third law of motion is that for every action, there is an equal and opposite reaction.
Apply these laws to politics and the result is California’s Nov. 3 general election, which has five propositions dealing with taxes out of 14 total measures.

By Bill McEwen
Politics 101
Proposition 40: Billionaire Tax
The headliner is Proposition 40, which would apply a one-time 5% wealth tax on the state’s estimated 200 billionaires. Those taking the hit would have five years to pay.
How much would this tax raise? It could be as much as $100 billion, according to the measure’s backers. Meanwhile, the state Legislative Analyst’s Office estimates it would generate “tens of billions of dollars.”
Where would this money go? Ninety percent is allocated to healthcare for low-income Californians. Education and food-assistance programs would get the remainder.
Republicans are united against Prop. 40, and Democrats are split, with Gov. Gavin Newsom leading the charge against it. Newsom, like many of the proposition’s opponents, argues that it will chase billionaires out of the state.
The prospect of Prop. 40’s passage also triggered Newton’s third law of motion.
One, it brought Silicon Valley’s moneyed class out of the shadows and into the glare of the public political arena. Sergey Brin, co-founder of Google and the world’s third-richest person at $266.5 billion, has contributed $82 million to the effort to defeat the proposition.
Two, it triggered two competing tax measures from the Brin-backed Building A Better California political advocacy group: Props. 41 and 42.
Supporters: SEIU–United Healthcare Workers West, U.S. Sen. Bernie Sanders, AFSCME California
Opponents: Gov. Newsom, billionaires Sergey Brin and Ripple Labs co-founder Chris Larsen, the California Teachers Association, California Primary Care Association, and California Medical Association.
Related Story: Billionaires Prepare $87 Million Ad Campaign to Block California Wealth Tax
Prop. 41: Audit New Tax Spending
The intent of this measure is to cancel out the billionaire tax if it passes. In addition to requiring audits of programs receiving funding from the tax, it also ensures that the new revenue count toward California’s spending cap.
That cap, commonly known as the Gann Limit, stipulates that if the cap is exceeded two consecutive years, excess revenue must be returned to taxpayers, directed to education, one-time infrastructure grants, or to local governments.
If voters approve Props. 40 and 41, the measure with the most votes is enacted.
Supporters: Building a Better California, Reform California, California Chamber of Commerce
Opponents: Those backing the billionaire tax
Prop. 42: Ban on New Personal Property Tax, Retroactive Taxes
This also is aimed at submarining the billionaire tax. Again, if Props 42 and 40 pass, the measure with the highest vote total takes effect.
Supporters: Building a Better California, Reform California, the State Building and Construction Trades Council of California, California Chamber of Commerce
Opponents: Those backing the billionaire tax
Prop. 43: Two-Thirds Approval to Pass Local Special Tax
What is a special local tax? Think Fresno’s Measure P parks and arts tax or Fresno County’s expiring Measure C transportation tax. If this proposition passes, special local taxes that qualify for the ballot via citizen-led signature petitions will need 66.66% for adoption. Today’s threshold is 50% plus one.
Supporters: Howard Jarvis Taxpayers Association, Reform California
Opponents: Assemblymember Buffy Wicks, D-Oakland; Evolve California
Prop. 3: Permanent High Earner-Income Tax
Back in 2012, California voters approved Proposition 30, which temporarily increased income tax rates on the top 2% of high-earner income taxpayers. Four years later, voters gave a thumbs-up to Proposition 55, extending the higher rates through 2030. Voter support for the hike increased from 55.4% in 2012 to 63.3% in 2016.
Now, organized labor wants to make this temporary hike permanent.
Who does the state define as a high earner? The tax applies to household income over $721,000 for couples and over $360,000 for individuals. Depending on California’s economy in a given year, the high-earner tax generates up to $15 billion annually for K-12 schools and community colleges.
The California Teachers Association has contributed $10 million in support of Prop. 3.
Supporters: AFSCME California, California Democratic Socialists of America, California Federation of Teachers, California Professional Firefighters, California School Employees Association, California Teachers Association, SEIU California
Opponents: California Taxpayers Association
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