Proposition 40, also known as the California billionaire tax, is a ballot initiative set for the November 3, 2026, election that would impose a one-time 5% tax on the net worth of California residents exceeding $1 billion. Sponsored by the labor union SEIU United Healthcare Workers West and drafted by tax law professors and economist Emmanuel Saez, the measure would direct 90% of its revenue to healthcare programs like Medi-Cal, with the remainder funding food assistance and public education. The initiative qualified for the ballot on June 17, 2026, after collecting over 980,000 valid signatures, though a last-minute offer to withdraw it in exchange for a smaller 2% levy was rejected by Governor Gavin Newsom. If passed, the tax applies to billionaires residing in the state as of January 1, 2026, and several high-profile figures—including Peter Thiel, Travis Kalanick, Larry Page, and Sergey Brin—have already left, potentially facing residency audits. While the union estimates the tax could raise $100 billion, the Legislative Analyst's Office projects tens of billions, and critics like the Hoover Institution warn that the permanent loss of income tax from departing billionaires could make the net effect negative by nearly $25 billion. This has sparked a fierce debate over whether the tax would fund vital services or drive wealth and economic activity out of California.