What does it take for Governor Gavin Newsom and gubernatorial candidates Democrat Xavier Becerra and Republican Steve Hilton to agree on policy? Apparently, it’s taxing billionaires, as they are all for killing Proposition 40 this November.
Proposition 40, also known as the billionaire’s tax, would be a one-time 5% tax on around 200 Californians with net worths over $1 billion. Its authors estimate that it would raise around $100 billion over five years. The money would be primarily allocated to state healthcare, with some funding for education and food assistance. This proposal comes in response to the One Big Beautiful Bill Act, which slashed $30 billion for Medi-Cal. Without Proposition 40’s generated income, Californians will face coverage loss and increased premiums.
This rare moment of bipartisanship could just show how influential wealthy donors are in California politics. It’s not a coincidence that the candidates reject Proposition 40 as they drum up funding for their own gubernatorial race. Nevertheless, Californians should not see this bipartisan opposition as a reason to reject Proposition 40, rather voters should question whether these politicians are representing the interests of their constituents or wealthy donors.
Becerra, like much of his campaign, has had a lackluster explanation for why Californians should oppose Proposition 40. He has simply called this a “half measure” while only endorsing Proposition 3, a permanent extension of California’s “millionaires tax” which was initially approved through Proposition 30 in 2012 and extended in 2016 through Proposition 55. His criticism of Proposition 40 stems from the one-time nature of the tax, falsely implying that a one-time tax on wealth prevents future efforts towards wealth redistribution.
However, Becerra’s support for Proposition 3 and the permanent extension of Proposition 30 primarily focuses on preserving existing revenue rather than addressing the immediate shortfalls that Proposition 40 does look to offset. Proposition 3, if passed, would preserve an estimated $5 billion to $15 billion annually beginning in 2031, with 40% being allocated to K-12 schools and community colleges with the remainder going to other state programs.
While this would help generate funds for essential services in the long term, it would not generate the additional revenue California’s healthcare funding shortfall calls for. Proposition 40 would be able to generate tens of billions in new revenue over several years, with 90% being dedicated to healthcare and the remaining also going to help fund healthcare and food assistance.
Newsom has also come out against the tax through his support of Proposition 42, which would nullify Proposition 40 if it received more “yes” votes. Proposition 42 would also make it harder to pass any type of retroactive tax. Newsom argues that his support for Proposition 42 will protect retirement holdings and savings from being taxed, despite there being no proposal for that.
Newsom went on to say that he supports a billionaire tax and closing tax loopholes on a national level. But because Proposition 42 was placed on the ballot by tech billionaire and Google co-founder Sergey Brin, his motives appear questionable. Instead of opposing wealth concentration, he appears to be catering to a donor base for any future political move.
Republicans in the state had been quick to oppose Proposition 40, claiming that it would hurt the economy, drive away businesses and discourage wealthy residents from living in California. Hilton’s opposition to Proposition 40 can at least be attributed to his overall support of policy that eliminates taxes on the first $150,000 earned and a flat 8% on any income earned after that threshold. These policies would give huge tax breaks to the rich while also dropping state revenue, only helping already wealthy millionaires and billionaires.
Hilton’s argument comes from a broader push to keep money in California, a response to fears that corporations will flee to other states with lower taxes. He also criticizes the state legislature’s ability to amend Proposition 40, which he argues could give way for less wealthy Californians to be included in this retroactive tax. This argument comes from the history of Proposition 30, originally passed in 2012 as a temporary measure to raise income taxes on high earners. The fear is inappropriately applied; while taxes were extended to lower earners, the change occurred only after Californians voted for it through Proposition 55 in 2016.
Arguments against Proposition 40 minimize California’s reliance on funding for basic public services. If Prop. 40 doesn’t pass, funding could be more strained. It would be harder to obtain care in California hospitals. Medi-Cal patients could be put on a longer waitlist, and lawmakers would have to make difficult decisions over which services to cut and how to change eligibility.
But at least the billionaires can keep their money.
Newsom, Becerra and Hilton all have different reasons to oppose Proposition 40. None of these arguments, though, reach the magnitude of the harm a $30 billion shortfall would do to the people. Not bank accounts, but people. Healthcare should not be treated as a commodity; billionaires can afford to pay taxes. Vote “Yes” on Proposition 40.
Diego Ruiz-Sagrero is an Opinion Staff Writer. He can be reached at druizsag@uci.edu.
Edited by Ruby Goodwin
