No on Prop 40

[Brad Forschner]

A “no” vote opposes this initiative to levy a one-time 5% tax on the accumulated wealth of taxpayers and trusts with covered assets valued over $1 billion, including shares of capital stock, bonds or other evidences of indebtedness, and any legal or equitable interest, to fund state health care programs, food assistance programs, and public education.

 

Jack Guidi from Americans for Tax Reform:

“The tax is retroactive and would apply to all eligible residents beginning January 1st, 2026. However, the earliest this tax could go into effect would be November 2026. This means California could end up losing tax revenue even if the ballot initiative doesn’t pass, as it incentivizes wealthy residents to escape before the tax passes.”

Jon Hartley, a policy fellow at the Hoover Institution, and Arthur Laffer, president of Laffer Associates:

“California doesn’t suffer from too little taxation. Its top marginal state income-tax rate is 13.3%, the highest in the U.S. Capital-gains taxes, corporate taxes and sales taxes are all at or near the highest in the nation as well. The wealth-tax initiative would amplify the problem of revenue volatility by taxing volatile paper valuations while assuming the tax base will sit still when the bill arrives.”

Aaron Withe, chief executive officer of the Freedom Foundation:

“SEIU and its enablers call this a healthcare funding measure — a response to federal Medicaid reforms. It isn’t. California already has the highest income tax rates in the nation. Its budget problems aren’t a revenue problem. They’re a spending problem that’s outpaced even California’s substantial tax base for years.”

Planned Parenthood Affiliates of California President Jodi Hicks:

“The initiative’s uncertain impacts on the state budget and lack of specificity on health care allocations will do more harm than good in the long term.”

Gov. Gavin Newsom (D):

“We can’t let a single advocacy organization, however well-intentioned, write the state’s tax code on its own terms. We make those decisions together through the elected Legislature, through a budget, and through the public process that voters built precisely to prevent any single interest from prevailing with disregard for the rest. At the same time, the fight to make the wealthiest Americans pay more in taxes is not one we should be fighting state by state. You may not be able to pick up and move to Texas or Florida to shelter your income from taxation, but I promise you that billionaires can, and do. Wealth is movable, and it shops for the state with the lowest taxes. The fight belongs at the federal level, where this broken system was created in the first place.”

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