An Intellectual History of California’s Proposition 40

On November 3, California voters narrowly rejected Proposition 40, a 5 percent tax on the net worth of the state’s billionaires. That outcome was not assured. In September, the measure led 52 percent to 46 percent in the Public Policy Institute of California’s survey of likely voters. Had it passed, the state that received 62 percent of all U.S. venture capital dollars in 2025 would have begun taxing founders on the paper value of companies, potentially driving them elsewhere.

The union that sponsored Proposition 40, SEIU-United Healthcare Workers West, supplied the signatures and most of the campaign money. The idea came from an intellectual movement that began with the French economist Thomas Piketty, found an institutional home at the University of California, Berkeley, and received financing from the foundation of a Boston insurance executive.