The ballot includes proposals addressing wealth taxes, the permanence of high-earner income tax rates, and local tax-raising abilities. One significant measure, Proposition 40, proposes a one-time 5% wealth tax on individuals with a net worth of at least $1 billion, excluding real estate and retirement accounts. This tax, levied on the assessed value of assets like stocks and bonds, could generate tens of billions of dollars, primarily earmarked for public health insurance programs.
In response to the proposed wealth tax, two counter-measures are also on the ballot. Proposition 41 aims to prevent the state from collecting taxes that bypass a long-standing state spending limit, while Proposition 42 would outright ban new taxes on financial assets and private businesses. If both a wealth tax and a counter-measure pass, the one with more votes will prevail, potentially leading to the defeat of the wealth tax even with majority support.
Another key measure, Proposition 3, seeks to make permanent a higher income tax rate for the state's top earners, a tax initially enacted to fund education and set to expire in 2030. This measure has generated significant annual revenue, largely directed towards schools, and its renewal is supported by the California Teachers Association.
Finally, Proposition 43 addresses local taxation by requiring a two-thirds majority vote for certain citizen-initiated special taxes. This measure, supported by business groups and anti-tax advocates, aims to increase the threshold for passing specific local levies that fund particular programs.