Prop 40: One Time Tax on Billionaires
Bay Curious
This episode dissects California's Proposition 40, a proposed one-time five percent tax on residents with net worth exceeding one billion dollars. Hosts and KQED correspondent Marisa Lagos explain that the measure was drafted by healthcare union
Key takeaways
- SEIU-UHW authored Prop 40 as a one-time five percent levy on California billionaires to replace federal Medicaid and food assistance cuts from H.R. 1
- Governor Gavin Newsom, Javier Becerra, and the California Democratic Party oppose the measure, citing enforcement difficulties and long-term budget risks
Main topics
- Proposition 40 billionaire wealth tax mechanics
- Federal H.R. 1 cuts to Medi-Cal and food assistance
Notable quotes
"Seven years ago in 2019, the aggregate wealth of California billionaires was $700 billion. Today it's $2.3 trillion. It has more than tripled in the last seven years."
Conclusion
Listeners gain a clear breakdown of how a novel state-level wealth tax
Transcript preview
Speaker 3 (0:01) From KQED. Speaker 5 (0:03) A reporter receives a shocking tip about something that happened inside a woman's prison. He starts asking questions, and what she uncovers is far bigger than one disturbing event. A deeply entrenched system, the people it protects, and the women who risk everything to challenge it from the inside. Snap Studios and KQED present We Are Jane Doe, a three-part investigative series. Listen on Snap Judgment wherever you get your podcasts. Speaker 8 (0:33) Who is going to win control of Congress this November? And what is it going to mean for the final two years of Donald Trump's disruptive presidency? I'm Susan Glasser. I'm Jane Mayer. Speaker 1 (0:44) And I'm Evan Osnos. We host the Washington Roundtable on the New Yorker's Political Scene podcast. Speaker 8 (0:50) We're following what key races could tip the balance of power in Washington this fall. We're also going to go deep on the influence of dark money. and tech billionaires. So Speaker 1 (1:00) join us in the run-up to the midterms in 2026. Subscribe to The Political Scene wherever you get your podcasts. Speaker 1 (1:09) Pelosi. Whether you love her. One of the best speakers the House of Representatives have ever had. Or hate her. Speaker 5 (1:16) That crazy Nancy. She is crazy. Speaker 1 (1:18) She's a force to be reckoned with. Speaker 8 (1:20) We're not letting anything stand in our way. Speaker 1 (1:23) From KQED, part of the NPR network, The Speaker. How Nancy Pelosi changed the face of power. Find it wherever you get your podcasts. Speaker 3 (1:33) If you live in California right now, it's pretty hard to avoid the ads about Proposition 40, otherwise known as the billionaire tax. You Speaker 5 (1:40) have questions about the wealth tax, Prop 40. So here are some facts. Newsom, Becerra, and Hilton are all voting no, calling it sketchy policy that will damage our economy. Speaker 8 (1:54) We must work together to pass this tax and ensure that our health care services are protected. The billionaire class cannot have it all. Speaker 4 (2:07) Proposition 40 is a one-time 5 % tax on the billionaires currently living in California. It's a hotly debated measure with folks like Bernie Sanders and Governor Gavin Newsom taking sides. Speaker 3 (2:22) It's an interesting one because traditional allies are not lining up the way you might expect on this one. Speaker 3 (2:30) I'm Erika Cruz-Gavara, host of The Bay. And I'm Olivia Allen Price, host of Bay Curious. Welcome to PropFest. It's a new week, and we've got six propositions left to discuss. Our teams at The Bay and Bay Curious are bringing you breakdowns of the statewide propositions on the California ballot, so you can vote with confidence in the November election. Speaker 4 (2:52) There are 14 propositions on the ballot this year, and we'll be taking you through all of them. We'll be looking at how they got on the ballot, the arguments for and against each one, really talk about how things could play out if they pass, and the money fueling it all. Today, we're discussing Speaker 3 (3:09) Proposition 40, a one-time tax on the wealthiest Californians. It reads like this on your ballot. Speaker 8 (3:17) Proposition 40 imposes one-time tax on certain taxpayers. Speaker 3 (3:22) Here to walk us through it is KQED political correspondent and co-host of the podcast Political Breakdown, Marisa Lagos. Welcome, Marisa. Hey, glad to be here. There's a lot to get into on Proposition 40, but before we start on the measure itself, can you give us some context for why this is on our ballot this year? Speaker 2 (3:40) Yeah. So this dates back to last year after President Trump took office. He and Republicans in Congress passed what's known as H.R. 1 or the Big Beautiful Bill. That included a reform of the tax code that enacted tax cuts for the wealthiest Americans to pay for those tax cuts. They. took billions and billions of dollars out of Medicaid and food assistance programs. In California, those cuts will probably be around $30 billion a year that will not be going specifically to Medi-Cal, which is California's Medicaid program. That's the health insurance program for low-income Americans. Speaker 2 (4:19) is basically aimed at replacing that money. Proponents of this tax estimate it would collect around $100 billion over a five-year period. That money would basically go to backfill the cuts from H.R. 1 or the Big Beautiful Bill. And Speaker 3 (4:35) so where does Prop 40 come into all this? Speaker 2 (4:39) SEIU-UHW, it's a health care union that represents a lot of rank-and-file health care workers here in California. They saw these cuts coming and decided they wanted to try to backfill them. And so they came up with this idea to impose a one-time tax on the billionaires in California. It would apply to anyone who has a net worth of over a billion dollars and was living in the state as of January 1st of this year. And so this is a one-time tax that would be paid out over a couple years and the union says would help essentially avoid massive cuts to the health care system, at least for the next few years. And how many billionaires do we have in Speaker 3 (5:14) California? And give us a sense of who these people are. Speaker 2 (5:17) There's an estimated like 200 or so people like Larry Page and Sergey Brin, who founded Google, Mark Zuckerberg of Meta. Basically, the people you hear about the most as being the wealthiest kind of Silicon Valley folks are the ones who are going to be subject to this tax if it passes. Speaker 3 (5:43) How are they assessing wealth in this scenario? Because I understand this is like, it's a little bit interesting how they're planning to get at the wealth of these people, because it's not necessarily the way that sort of everyday people hold their cash. Speaker 2 (5:57) Right. So, I mean, maybe to back up, like, let's just start talk a little bit about like how we pay taxes as sort of average working people. Right. Like if you and I make a salary out of every paycheck, there's an income tax that is taken by the state. If we have money in the stock market and we sell that stock and we make some capital gains, we would pay based on those capital gains that we realized. And then, of course, there's things like property taxes, sales taxes, other things. The critique of billionaires and really wealthy people is that they don't make money through the same way that normal people do. Right. I think there's been reporting that Jeff Bezos's Amazon salary, for example, is like eighty five thousand dollars. So he might actually qualify for some low income programs based on that.