California voters heading to the polls this November will be asked to settle one of the state’s oldest and most persistent political arguments: who exactly should shoulder the tax burden that funds schools, hospitals and local services. Of the 14 statewide ballot measures voters will consider on Nov. 3, five of them circle back to that same core question, and the answers could ripple far beyond California’s borders.
At the center of the debate is Proposition 40, a measure that would impose a 5% tax on the personal wealth of California’s roughly 200 billionaires, with the bulk of the money earmarked for healthcare programs. If approved, it would mark the first wealth tax of its kind anywhere in the country, a distinction that has already drawn national scrutiny. Supporters and opponents alike expect that a “yes” vote would trigger years of courtroom battles, along with renewed pushes to bring similar wealth taxes to other states — and potentially to Washington.
Observers have compared the measure’s potential reach to Proposition 13, the landmark 1978 property tax measure that sparked tax revolts across the country. Not since then has a single California ballot initiative carried the potential to reshape tax policy on a national scale the way Prop. 40 might.
The financial stakes have attracted heavy spending from both sides, not just on Prop. 40 but also on two related measures, Propositions 41 and 42. Those two measures were placed on the ballot by wealthy opponents of the billionaire tax as a kind of insurance policy, designed to blunt its effects should it pass.
Two additional measures, Propositions 3 and 43, revive older fights over taxation that have simmered for years.
Proposition 3 shares ideological DNA with Prop. 40, built on the premise that California’s wealthiest residents should continue carrying a disproportionate share of the tax load to keep public services funded. The state’s income tax system already leans heavily on high earners, who generate the majority of California’s income tax revenue. Back in 2012, facing a budget crisis, then-Gov. Jerry Brown and voters approved a temporary surtax on top earners to help close the gap. Brown pledged the surtax wouldn’t last forever, but a coalition of public employee unions — led by the California Teachers Association — later pushed through an extension that kept it alive through 2030.
Proposition 3 would make that surtax permanent, generating anywhere from $5 billion to $15 billion annually depending on economic conditions. Legislative allies and Gov. Gavin Newsom gave the measure a boost by placing it near the top of the ballot, though some union officials worry that the high-profile clash over Prop. 40 could overshadow — or complicate — support for Prop. 3.
Proposition 43 represents the opposite philosophy, echoing the tax-limiting spirit of Prop. 13 from nearly 50 years ago. In 1996, voters approved Proposition 218, which extended Prop. 13’s two-thirds vote requirement to “special taxes” imposed by local governments for specific purposes. For years, it was widely assumed that same two-thirds threshold applied to special taxes proposed through citizen initiatives as well.
That assumption unraveled in 2017, when the California Supreme Court, ruling in a case involving a local marijuana tax, hinted that initiative-driven special taxes might only need a simple majority to pass. The ambiguity set off years of legal confusion and conflicting lower court decisions. The matter appeared settled in 2020 when the state’s high court declined to review an appellate ruling that exempted citizen-initiated tax measures from the two-thirds requirement.
Since that decision, hundreds of special tax measures — largely local sales taxes — have passed with simple majority support, and dozens more are currently in the pipeline. Proposition 43 would undo that precedent, restoring the two-thirds vote requirement for these initiative-based taxes. It’s the latest in a string of attempts by anti-tax advocates to reverse course on the issue, following an earlier effort that the state Supreme Court itself blocked from the ballot in 2024.
This year’s version of the measure was originally far more expansive, but a last-minute compromise scaled it back. Under the deal, tax-limitation advocates agreed to narrow the measure’s scope in exchange for lawmakers abandoning a competing proposal that would have imposed a two-thirds vote requirement on anti-tax measures themselves.
Whether Prop. 43 finally puts this decades-long dispute to rest remains to be seen. Given California’s long history of tax fights, it seems safe to assume this won’t be the last chapter in the ongoing debate over who should pay — and how much.
Original source: CalMatters
