- Newsom endorsed Proposition 42, which would block retroactive wealth taxes and restrict future state taxes on personal property.
- Proposition 40 proposes a one-time five percent tax on qualifying California residents worth more than one billion dollars on January first, twenty twenty-six.
- If both measures pass, the measure with more yes votes prevails, determining whether the billionaire tax takes effect.
Gavin Newsom endorsed Proposition 42 on Friday, October 9, 2026, backing a measure that would block a proposed one-time tax on billionaires and restrict California’s ability to tax personal wealth in the future.
The endorsement goes beyond opposing the current proposal. The measure would also bar retroactive wealth taxes and reach personal property such as investments, business interests, art and retirement savings.
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Newsom’s office announced his positions on most of the 14 statewide ballot measures California voters will consider in November 2026. He has not endorsed or opposed Proposition 41, another measure backed by Sergey Brin that would place revenue from Proposition 40 under state spending limits and audit requirements, spokesperson Izzy Gardon said.
Newsom has argued that a California-only levy could drive wealthy residents out of the state and cut future income-tax revenue. He has also supported a national tax on billionaires.
The competing proposals now put voters before a broader choice than whether to approve a single tax.
The two measures set up competing rules for the same wealth
Proposition 40 would impose a one-time 5% tax on people with net worth above $1 billion who lived in California on January 1, 2026. The date would determine eligibility even if someone moved away afterward.
Proposition 42 would bar retroactive taxes like that one and block future state taxes on personal property. Its coverage could include financial investments, business interests, art collections, pensions and 401(k) accounts before retirement distributions begin. Real estate would be excluded.
| Proposal | Main effect | Other provisions |
|---|---|---|
| Proposition 40 | A one-time 5% tax on qualifying residents with net worth above $1 billion on January 1, 2026 | 90% of revenue would go to health care; 10% to education and food assistance |
| Proposition 42 | Would prohibit retroactive wealth taxes and future state taxes on personal property | Would exclude real estate and could cover financial assets and retirement savings |
The proposals treat retirement assets differently. Proposition 40 exempts most pensions and individual retirement accounts, but includes Roth IRAs valued above $10 million. Proposition 42’s broader language could cover pensions and retirement accounts, including 401(k) savings before distributions start.
Proposition 40 would require California to create a valuation system within six months. The system would cover holdings such as stocks, investment accounts, business interests, art collections, wine vaults and cars.
The campaign supporting Proposition 40 says the levy could raise approximately $100 billion over five years for health care and help replace federal health-care funding cuts. The measure would allow lawmakers to amend it with a two-thirds vote, provided changes further the purposes of the 2026 Billionaire Tax Act.
Wealthy donors and labor groups have lined up on opposite sides
Brin, Google’s co-founder, financed the campaign against Proposition 40 and backed the effort behind Proposition 42. By October 1, 2026, he had contributed more than $138 million to opposition efforts, including support for Propositions 41 and 42.
The broader opposition campaign had raised more than $300 million, nearly one-third of it from Brin. Its fundraising total was approximately 10 times the amount raised by Proposition 40’s campaign.
The coalition opposing Proposition 40 includes Planned Parenthood, the California Teachers Association, police and fire unions, most Republican officials and many prominent California Democrats. Opponents say a wealth tax could prompt wealthy residents to relocate, taking economic activity and income-tax payments with them.
Proposition 40 supporters counter that the money would fund health care, education and food-assistance programs. Debru Carthan, vice president of Service Employees International Union–United Healthcare Workers West, criticized Newsom’s endorsement.
“By voting yes on Prop 42, he’s showing California his true colors.”
“He’d rather millions of children and families lose their healthcare than ask a couple hundred billionaires to finally pay their fair share.”
Carthan said the measure would put the interests of wealthy backers ahead of families who could lose health coverage. Proposition 40 supporters also described Newsom’s position as being “in lock step with his billionaire backers.”
Newsom’s position cuts across party and labor lines
The California Democratic Party’s executive board endorsed Proposition 40 earlier in 2026, putting its position at odds with the governor’s. A September Public Policy Institute of California poll found 52% of likely voters supported the measure and 46% opposed it. A late-September poll found support among 65% of California Democrats.
U.S. Sen. Bernie Sanders, an independent from Vermont, headlined a Proposition 40 rally in Los Angeles on October 5, 2026. California Democratic U.S. Reps. Ro Khanna and Judy Chu also supported the measure.
Other prominent Democrats have opposed it or withheld support. Xavier Becerra, the former U.S. secretary of Health and Human Services identified as Newsom’s successor, opposed the proposal, as did Los Angeles Mayor Karen Bass. Los Angeles City Council member and mayoral candidate Nithya Raman had taken no position as of October 6, 2026.
In Congress, 41 California Democratic members had either opposed Proposition 40 or stayed publicly silent, excluding Chu and Khanna. The measure has also drawn backing from six Nobel laureates, including economists Joseph Stiglitz and Paul Krugman. University of California, Berkeley economists Emmanuel Saez and Gabriel Zucman helped formulate it.
Newsom has opposed major California tax increases during his eight years as governor while advocating a national tax on billionaires. His stance comes as he prepares to leave office and is viewed in the research as a potential 2028 presidential candidate.
Voters will decide how the measures interact
If both measures pass, the one with more “yes” votes would prevail. That rule would decide whether the proposed one-time levy takes effect or the opposing measure blocks it.
The ballot decision also includes Proposition 41, whose spending limits and audit requirements would apply to Proposition 40 revenue. Newsom had not taken a position on that measure as of October 10, 2026, Gardon said.
