In living proof that even California voters occasionally reside on the correct side of the sanity divide, Proposition 40, a measure on the November 2026 ballot that would have levied an allegedly “one-time” tax on the ever-shrinking number of billionaires still residing in the Golden State, has failed to pass. As of the time of this writing (11:30 AM PST 11/10/26), the measure is failing 47.2 percent to 52.8 percent, trailing by over 621,000 votes.
The proposition would have, according to its proponents, which included Sen. Bernie Sanders (I-VT), imposed a one-time tax equal to 5 percent of the wealth, as measured by the state, of California billionaires, with the funds raised to be directed toward publicly funded healthcare costs. Opponents pointed out that the bill was written in such a fashion that it would have allowed the California State Legislature not only to levy the tax more than once, but also to modify the threshold at which the tax would kick in to any personal wealth amount it desired. As I summarized the proposition before the election:
Proposition 40 has, unsurprisingly, gathered the most interest of the four propositions. It has effectively split the Democrat Party, with the socialist-leaning side loving it and the more pragmatic side — all right, stop laughing — loathing it. When you have Gavin Newsom opposing a tax increase, you know it’s over the top. It warrants mention that in the same breath Newsom has said this is a problem that should be fixed at the federal level. Translation: make me President, and I’ll raise taxes across the country so millionaires and above won’t be able to dodge them by moving from state to state.
Proposition 40 carries an inherent danger in that within very broad limits, the State Legislature can modify the text of such an initiative, if passed, to say pretty much whatever its little heart desires. Oh, you said one-time billionaire's tax? You meant one-time or more tax on whichever wage-earning demographic we pick out of a hat, right? But of course Californian politicians would never do such a thing …
The proposition, unlike most “tax the rich” efforts, sharply divided Democrats. Its supporters, including failed 2026 gubernatorial candidate Tom Steyer who is estimated to have spent some $213 million of his own money on said campaign during the June 2026 primary only to finish third and thus not make it to the November 2026 ballot, admitted that Proposition 40 had flaws even as they stumped for it.
”I have said all along this is a problematic tax in the way that it's been written,” Steyer said Monday in San Francisco in what was billed as a daylong convening called “U.S. vs. Billionaires,” that brought together leading policymakers, economists, organizers and advocates to strategize how to reduce the power of billionaires and boost the power of working people. He was the token benevolent billionaire.
“It's a one-time tax, not permanent tax. This money does not go broadly across California.”
Oh, but it gets better, as the people who pushed for the bill insisted that they didn’t have enough time to write something decent because, if not passed, the children whose number they seek to ever decrease through removal of all abortion restrictions will be without healthcare.
”We have this (ballot measure),” David Gamage, a professor of law at the University of Missouri and a key architect of Prop 40, told the Chronicle's editorial board. “Is this the right solution? It almost doesn't matter. This is the only solution on the table.”
Apparently, the adage that wonders aloud why there is never enough time to do it right, yet there is always enough time to do it over, applies in government as well as in the business world.
Proposition 40 is, in a nutshell, California’s current government, not uncoincidentally run entirely by Democrats. It seeks to portray itself as the benign ruler, a legal Robin Hood taking from the nasty rich and dispensing to the poor what they are being deprived of. The problem is that, in doing so, the government both consistently fails to spend its tax-derived revenue wisely and seeks to usurp the role of private enterprise. When private enterprise institutions are forced to compete for the wage earner’s dollar for goods and services, the wage earner is the ultimate winner, as businesses vie with each other to offer the best goods or services at the lowest prices. Government, courtesy of its de facto monopoly on whichever enterprise it seeks to enter, has no such pressure to excel. It therefore ladles out slop with one hand and self-congratulatory platitudes with the other, constantly pleading for more money instead of providing a shred of evidence that it is spending what it already has wisely.
Government cannot do better what private enterprise can do when motivated by market share and profit. Even in a field as sensitive as health insurance, low-income individuals and families can receive quality coverage when the government uses its powers not to throttle, but rather reward providers who do things the right way. But, since doing so does not enhance the individuals in government who view it as a fast track to power and corresponding wealth, who am I kidding? At least the California voters got it right this time.