[Music playing in the background: “Where have all the Progressives gone? …. Oh, when will they ever learn.”]
Next to eleven (YO), the number 40 is our most meaningful two-digit number. Every person who turned 40 knows this. It is prominent throughout the bible; the Lenten season is 40 days; it rained for 40 days and 40 nights; the Jews wandered in the desert for 40 years (only to end up in Palm Beach County, where in 2000 they unintentionally voted for the wrong Presidential candidate and changed the history of the United States); it is the only number that when spelled out, the letters are in alphabetical order; 40 winks, 40-hour work week; and the Pop Charts Top 40. Ali Baba and the 40 Thieves is a morality tale that highlights the evils of greed. Our national debt will shortly be $40 trillion, and the total wealth of households in the U.S., which have $50 million or more, is $40 trillion!
But the #1 reason that 40 is important is that it is the number assigned to the wealth tax initiative on the California ballot this November, Proposition 40!
Prop 40 would create the nation’s first-ever wealth tax, imposing a 5% one-time tax on billionaires, and only the 200 or so billionaires who were resident in California on January 1, 2026. It would raise as much as $100 billion, primarily to cover the shortfall in health services funding created by Trump’s big ugly bill. The initiative was sponsored by Service Employees International Union-United Healthcare Workers West (SEIU-UHW).
U.S. Supreme Court Justice Louis Brandeis said nearly one hundred years ago, in 1933, “We can have democracy in this country, or we can have great wealth concentrated in the hands of the few, but we cannot have both.” Prop 40 is our path to democracy, making it perhaps the most important California ballot initiative in modern times. For sure, it would be the most important tax legislation since the income tax was introduced more than 100 years ago.
One might classify this initiative as a no-brainer. Polling consistently shows support for taxing billionaires is sky high. And yet, many elected officials, led by Governor Newsom, the California Teachers Association (CTA) and the state SEIU, and even a few nonprofit organizations, have either opposed the initiative or are staying neutral. How can that be? It can be explained in one simple word: Plutocratifornia.
It is easy to understand why politicians would oppose an initiative that would upset their donors. Newsom, for example, is obviously counting on his billionaire friends to support his run for President. San Francisco’s billionaire Mayor–surprise, surprise–opposes the measure. But for unions and nonprofits, Harold Meyerson writes in American Prospect: “Each has what I’d term parochial reasons to oppose what I believe must be the labor-left’s emerging strategy to stop the epochal upward redistribution of Americans’ income and wealth, which has moved the nation toward oligarchic rule.”
“CTA and SEIU are generally the largest funders of Democratic campaigns and progressive organizations in California, which may pose a problem this fall for some of the state’s leading progressive groups [such as] California’s foremost voter mobilization organization in working-class Black and Latino communities…California Calls.” And reportedly they did pressure California Calls to stay neutral despite the fact that the money raised would provide healthcare directly to the communities that California Calls serves.
Also puzzling is Planned Parenthood of California opposing Prop 40, which apparently was due to its close relationship with Newsom. According to a KFF study, “nearly one-third of female Medi-Cal recipients between the ages of 15 and 49 in California who receive family planning services…are Planned Parenthood clients.”
Meyerson concludes, “American democracy ultimately rests on a foundation of widespread economic and political egalitarianism, for which wealth taxes are a necessity and will only become more so. If not now, when?” [emphasis added]
The arguments put forward by the opposition to obfuscate blatant plutocracy are petty or ill-informed, as described in a paper published on the Institute on Taxation and Economic Policy website. They usually start with criticizing the president of UHW, Dave Regan, for not working cooperatively with other unions in putting the initiative on the ballot. Seriously? Who would have been willing to take on Newsom and the billionaires?
This criticism is immediately followed by, “it is poorly written.” Except, no one can point to how it is poorly written, because it is actually brilliant. Then the opposition divides, with some saying, “it is only one-time” and others saying, “it will lead to ongoing wealth taxes.” Which is it? Truth be told, we should want new ideas tested: if they work, we make them permanent, if not, we’re back to the drawing boards.
Of course, there really aren’t any other drawing boards. Where is California to get the money it needs to provide for its citizens’ well-being? It must come from the ultra-rich. And since they pay very little in income taxes–California billionaires pay only $3.5 billion in income taxes, less than 0.2% of their wealth, because they hoard unrealized gains that aren’t subject to tax–a wealth tax is the best answer.
It is important to emphasize that this proposition does NOT increase taxes on anyone other than billionaires…unless it doesn’t pass. The state will have to get the revenue from someplace to deal with the health crisis, and true to plutocratic form, it will likely fall on everyone except billionaires.
California Budget & Policy Center, in its analysis of Prop 40, points out that Mark Zuckerberg, “assuming he has approximately $200 billion in wealth subject to Prop. 40 on December 31, 2026…would owe around $10 billion in tax, which he could pay in five annual installments of $2 billion. His remaining wealth of around $190 billion would still be more than the entire economies of dozens of countries…. For comparison, Zuckerberg’s net worth increased 175% from 2023 to 2024 according to Forbes data, from $64.4 billion to $177 billion.”
The opposition’s big bogeyman is the claim that there will be a mass exodus of billionaires out of California, spreading the harms they cause to other states, but the facts suggest, and studies show, it isn’t remotely true. To avoid California taxes, one must not only move, but demonstrate a complete change in one’s social life, i.e., religious connections, clubs, and doctors. As Yousef Baig wrote for Cal Matters, if California doesn’t solve its fiscal crisis, “[i]t’s not Thiel or the Google guys we need to worry about leaving California — it’s everyone else.”
Robert Frost said that “the definition of a liberal is someone so open-minded he will not take his own side in an argument.” Perhaps that explains why we’re seeing nonprofits ignoring not only the interests of their constituencies, but putting democracy at risk. Somewhat ironically, one of the nonprofits going full-out for Prop 40 is Patriotic Millionaires. Millionaires are for a wealth tax; Planned Parenthood California is against it?!
Most importantly, the California Democratic Party and the California Labor Federation have endorsed the initiative. But to overcome the $100+ million being spent by billionaires to defeat Prop 40, an all-out effort is required.
Gabriel Zucman, the distinguished economist and wealth expert, was quoted in an article in Capital and Main, “For most people, accumulating wealth is a good thing — it’s safety for your older [years], or in case you lose a job,” the professor said. “But the super rich don’t accumulate billions for retirement. For them, wealth is power, the power to influence policymaking, buy elections, buy media companies — as we’ve seen in the U.S. in recent years — and influence the prevailing technology. The concentration of wealth erodes democracy.”
Wealth inequality is at the core of virtually all the problems our society faces, from environmental damage to poor health and education outcomes, even incarceration rates. My foundation and I have been supportive of more than a hundred organizations working to address these social problems, but the Excessive Wealth nonprofit and I have never had an opportunity like this to begin to attack plutocracy head on. The public has been saying NO to billionaires. Will it say YES to Prop 40 in November?
Speaking at a cocktail reception hosted by the Patriotic Millionaires, Zucman, who splits his time between teaching at UC Berkeley and the Paris School of Economics, said: “If the billionaire tax passes in November, it’s going to have a ripple effect not only in the U.S., but globally… The whole world is watching what is happening in California.”
p.s. Given the importance of this proposition, I encourage you to take advantage of the various links I have provided and look at the Yes on 40 factsheet and website. As you might infer from this blog, I urge you to support Prop 40 in any way you can.