Prop 40: The Fine Print

Prop 40 is the billionaire tax. 

It would charge a one-time 5% tax on Californians worth more than $1 billion. 

Most of us will never pay it. But one part of Prop 40 is worth knowing about.

Lawmakers Could Change It

Prop 40 lets the state Legislature change the tax later. 

They would need a two-thirds vote in each house. 

They would not need to ask voters. 

Today, one party holds more than two-thirds of the seats in both houses. 

So that vote is not a high bar.

The only other rule is that any change must fit the purpose of the law. 

Opponents say lawmakers could read that purpose broadly. 

They worry the $1 billion line could be lowered someday to reach more people. 

That could mean taxing the savings and retirement accounts of regular families.

Supporters say this will not happen. The law says many times that its purpose is to tax billionaires. 

Some legal experts agree that a big change would be hard. 

It would likely be fought in court. It might also need another vote of the people.

Why It Matters

Today, California does not tax what you own. 

It taxes what you earn and what you sell at a gain. 

Prop 40 would create a new kind of tax in our state: a tax on wealth itself. 

Even if it starts with billionaires, many people want to know who it could reach later.

What Should You Do?

How you vote is up to you. Ballots go out in the mail starting October 5. 

If you have questions about how Prop 40 could affect your plan, please call or email the office.