California’s 225 billionaires, some of whom are spending hundreds of millions of dollars to oppose a one-time 5% tax that would preserve health care access for millions of Californians, have seen their wealth increase by at least $570.8 billion since Trump’s reelection. Rather than giving back to the Californians who made their success possible, tech bros led by Google co-founder Sergey Brin have spent more than $150 million to defeat Prop 40 and are blanketing our TV screens with ads that lie about the proposition. Don’t fall for them.
| CLAIM | FACT |
|---|---|
| Prop. 40 will hurt start-ups and undermine entrepreneurs who are billionaires “on paper only.” | Prop. 40 includes an Optional Deferral Account for founders whose wealth is tied up in a private business or other illiquid assets. They can defer payment and pay as they take proceeds out of the business. If the business fails, they do not owe tax on value they never realize. Everyone subject to the tax may also pay over five years rather than in one lump sum. |
| The estimated $100 billion in revenue raised by Prop. 40 should go into the state’s general fund and support priorities like guaranteed school funding, not just health care. | Prop. 40 was designed to make-up for the health care cuts included in President Trump’s “Big Beautiful Bill.” Under that law, federal Medicaid spending will be cut by $1 trillion over the next decade to finance tax cuts that disproportionately benefit the wealthy. California state officials estimate this could reduce Medi-Cal funding by $25 billion per year. 3.5 million Californians could lose health coverage, and 150,000 frontline health workers could lose their jobs. The cuts also increase the risk of hospital, clinic, nursing-home, and rural-provider closures. |
| "It's not a billionaire tax, it's an everyone tax." | The tax applies only to people with more than $1 billion in covered wealth, no more than about 225 Californians. When billionaire wealth goes untaxed, Californians pay more to keep hospitals and public services running. |
| "Every Californian must report all their assets to the state tax board." | Most taxpayers simply check a box certifying that they are under the $1 billion threshold. Only people who cannot certify must provide detailed disclosures. |
| "Politicians can expand this to your retirement account or home equity." | Prop. 40 specifically exempts qualified pensions, most retirement accounts, and real estate held directly by a taxpayer or through a revocable trust. It does not give lawmakers power to turn it into a tax on ordinary Californians. |
| California already lost ~$500 billion in tax revenue when billionaires fled the state. | Research shows that wealthy people rarely leave high-tax places in large numbers. California’s advantages, its economy, universities, infrastructure, culture, and business networks, are not easily replaced. Moving now would not avoid the tax: it applies to billionaires who were California residents on January 1, 2026. |
| Prop 40 will cost the state $25 billion in lost income tax revenue over 4 years. | Prop. 40 is a one-time tax that is estimated to generate $100 billion dollars in revenue. The $25 billion in lost revenue figure comes from the billionaire-funded Hoover Institute, which relies on the assumption that billionaires will leave California, causing the state to lose their income-tax payments year after year. It compares those projected long-term losses with the revenue from a tax collected only once. |
| "The top 1% pay ~40% of state revenue, so we can't afford to tax them more." | That statistic is about all high earners paying income tax, a much larger group than the 225 billionaires Prop 40 targets. |
| A wealth tax failed in France, it would be a disaster in California. | France’s tax was an annual tax on millionaires, not a one-time tax on billionaires. It started at €1.3 million and exempted major categories of business wealth. Prop. 40 is narrowly targeted at people with at least $1 billion in covered wealth. |
| Prop. 40 will spend years in legal limbo and will be subject to endless legal challenges. | Prop. 40 creates an expedited process to resolve broad constitutional claims. Challenges must be filed within 60 days, heard in a single case, and appealed directly to the California Supreme Court. This specifically is designed to prevent broad challenges from dragging on for years. |