Wealth Tax News – 10/9/2026

With less than a month until Election Day, California’s Prop 40 is losing ground. The proposed one-time 5% tax on billionaires is slipping in the polls, and the opposition, led by Sergey Brin, is vastly outspending its supporters. Sen. Bernie Sanders is rallying for the measure, while Gov. Gavin Newsom and some labor and health groups oppose it.

Commentators are split over its economic effects, and the state’s Franchise Tax Board would face serious challenges on residency, valuation and litigation if it passes. Beyond California, Washington voters will decide whether to repeal the state’s new 9.9% millionaire tax through Initiative 645, and Colorado voters will consider graduated income tax rates of up to 8.4%. In Oregon, a union-backed coalition has filed a wealth-tax initiative aimed at the 2028 ballot. Supporters, including SEIU-UHW’s Dave Regan and Rep. Ro Khanna, are already framing wealth taxation as a national issue for 2028.

Please find summaries of relevant articles with web links below. Please reach out to any member of your Brownstein National Tax Policy Group team with questions or to set up a meeting.

California Wealth Tax Initiative 2026: Latest Polls – The New York Times
The New York Times has set up a page on their website tracking recent polling on the California wealth tax proposal.

Federal

Bernie Sanders makes a late push for California billionaire tax – POLITICO; Prop 40: Vermont Senator Bernie Sanders holds rally supporting California billionaire tax proposal in San Francisco – ABC7 San Francisco. Over the weekend Sen. Bernie Sanders (I-VT) made a late push for Prop 40 as support is starting to slip and opponents are vasty outspending proponents. Backed by the California Democratic Party and California Labor Federation, the measure has divided Democrats. Gov. Gavin Newsom (D), Planned Parenthood, and some labor groups argue it is poorly designed and could erode the state’s tax base. Supporters hope Sen. Sanders can energize progressive voters and frame the contest as a test of the party’s commitment to working-class interests, but his ability to persuade undecided and centrist voters remains uncertain.

Washington Needs the Tax-Reform Spirit of ’86 – WSJ. Rahm Emanuel argues that Washington should work in a bipartisan manner to simplify the tax code and curb tax loopholes that preserve wealth rather than promote growth. He proposed ending tax-free borrowing against appreciated assets and stepped-up basis at death, limiting offshore profit shifting through international coordination, eliminating preferential treatment for carried interest, and raising the capital-gains rate closer to ordinary-income rates. He noted that these reforms, paired with fiscal discipline, would reduce deficits and discourage tax avoidance while supporting productive investment.

Mr. Financial Know-Nothing – WSJ. Wall Street Journal columnist Matthew Hennessey criticizes Michigan Senate candidate Abdul El-Sayed’s (D) claim that billionaires “park” their wealth in stocks rather than invest in economic opportunity. Hennessey argues that stock markets support growth by helping companies raise capital for expansion, innovation and hiring, while secondary trading serves valuable economic functions. He also emphasizes that stock ownership through retirement accounts and mutual funds allows ordinary Americans to participate in wealth creation and portrayed El-Sayed’s remarks as a misleading view of how investment and financial markets work.

Separately, during the Michigan U.S. Senate debate last night between candidates El-Sayed (D) and former Rep. Mike Rogers (R), El-Sayed endorsed taxing billionaire wealth.

California

The Battle to Pass a Billionaire Tax – The New Yorker. The article examines California’s Proposition 40, a proposed one-time 5% wealth tax on fortunes of at least $1 billion, payable over five years, that its authors estimate would affect roughly 200 people and raise $100 billion, with 90% earmarked for health care threatened by federal Medicaid cuts. Spearheaded by SEIU–United Healthcare Workers West President Dave Regan and championed by Rep. Ro Khanna, the initiative has divided Democrats and organized labor despite substantial voter support for taxing billionaires. Gov. Gavin Newsom and technology industry opponents argue that it could drive wealthy residents out of California, erode existing tax revenues, and harm innovation; Sergey Brin contributed $102 million to a leading opposition group. The California Teachers Association also opposes the measure, partly out of concern that the backlash could undermine its separate initiative to extend higher income taxes on millionaires. Although late-September polling showed a slight majority of decided voters supporting Proposition 40, it faces heavily funded opposition, competing Propositions 41 and 42 that could nullify it, and potential litigation over its retroactive January 1, 2026, effective date, residency rules, and asset valuations. The article frames the contest as a test of whether Democrats will prioritize confronting concentrated wealth over preserving relationships with major technology donors—and as a potential precursor to a defining wealth-tax debate in the 2028 presidential campaign.

Billionaires are fleeing California. The tax agency is preparing to chase them. – POLITICO. California’s Franchise Tax Board would face unprecedented enforcement and administrative challenges if voters approve Prop 40, as billionaires claiming to have left the state prepare to contest the wealth tax. The agency would need to scrutinize residency based on taxpayers’ personal and business ties, not simply changes in addresses or driver’s licenses, while valuing complex assets and preparing to administer the tax within six months of passage. Tax experts and former state controller Betty Yee warn that disputes over residency, asset valuation, retroactivity and constitutionality could produce prolonged litigation and strain even an agency known for aggressively pursuing wealthy taxpayers.

Sergey Brin’s Billionaire-Tax Foe Takes Wealth Fight National – Bloomberg Law. SEIU-UHW leader Dave Regan views Prop 40 as a potential springboard for wealth-tax campaigns nationwide, even if the billionaire-tax measure fails in November. Regan argues it is needed to offset roughly $100 billion in anticipated federal healthcare funding losses, while opponents dispute that need and warn the tax could drive wealthy residents and investment out of California. Facing a tight race and a heavily financed opposition campaign, Regan is relying on grassroots organizing and allies such as Sen. Sanders. He also reports interest from roughly two dozen other states and is considering another California campaign and a Florida effort in 2028.

California’s Wealth-Tax Fight Is Going National – Bloomberg. Erika Smith, a Bloomberg Opinion columnist, argues that Prop 40 is fueling a national debate that will persist even if the measure fails amid slipping support and heavy opposition spending. Economic insecurity and resentment toward the ultrarich have divided Democrats, with Sen. Sanders and Rep. Ro Khanna (D-CA) backing the measure while Gov. Newsom opposes it over concerns about billionaire departures and favors a national approach. Smith argues that wealth taxation could become a defining issue in the 2028 Democratic presidential primary, reinforced by Sanders and Khanna’s proposed federal legislation imposing an annual 5% tax on billionaire wealth.

Katie Porter rips California billionaire tax, Prop 40, on podcast – New York Post. Former Rep. Katie Porter criticized Prop 40 and argued that it would funnel billions to private insurers and health care corporations without reforming the system or guaranteeing that patients benefit. Although she supports higher taxes on the wealthy, she said that the measure is too narrowly targeted, disproportionately prioritizes health care over other state needs, and could sacrifice recurring state revenue if wealthy residents leave California. Her opposition aligns with Gov. Newsom and several medical and reproductive health organizations.

California’s oligarch tax would change America – Financial Times. Edward Luce argues that Prop 40 is more significant politically than fiscally: despite its design flaws, it could reshape the national debate over taxing extreme wealth. He compares it to California’s 1978 property-tax opposition and criticizes billionaire-funded opposition, including a competing proposal to constitutionally prohibit most wealth taxes and advertising portraying Prop 40 as a threat to ordinary taxpayers. With Gov. Newsom also opposing the measure, Luce warns that its defeat could preserve billionaires’ tax advantages while deepening the resentment that threatens their long-term interests.

Not even Nobel Prize winners can save the ‘billionaire tax’ – New York Post. Adam Michel, Tax Policy Director at the CATO Institute, argues that Prop 40 would undermine the state’s tax base rather than deliver the promised health care funding. Responding to an endorsement by six Nobel Prize-winning economists, he disputed their claims about wealth-tax history, billionaires’ tax burdens, projected revenues and Medi-Cal funding cuts. Citing European wealth-tax repeals, reported billionaire departures and potential constitutional challenges, Michel argued that the measure would raise less than supporters predict while reducing ongoing income-tax receipts and potentially shifting the burden to remaining taxpayers.

Wealth tax would ‘ruin California,’ Reagan advisor Art Laffer warns – Fox Business. Art Laffer, a former adviser to President Reagan, warned that Prop 40, would drive billionaires out of the state and discourage wealth creation. He described the measure as the “single most important proposition on ballot today in America” and said it could destroy California.

Fact check: Could California lawmakers expand the billionaire tax to everyone? – LAist. A CalMatters fact-check finds that claims Prop 40 could be expanded to tax everyone overstate lawmakers’ authority, although assertions that the billionaire tax could never change are also too absolute. The measure allows amendments by a two-thirds legislative vote only if they are consistent with and further its purposes, which repeatedly specify a one-time tax on billionaire wealth. Legal experts say those restrictions would make extending the tax to non-billionaires difficult, and its constitutional provisions would likely require voter approval for such an expansion. Any disputed changes would ultimately depend on how courts interpret the measure’s language and voter intent.

How adopting a wealth tax will harm the average California family – Orange County Register. Wayne Winegarden argues that Prop 40 would harm ordinary families by discouraging investment, slowing job and income growth, and reducing ongoing tax revenues. He cites his institute’s estimates of $65.5 billion in lost investment, an economy 3.4% smaller over five years, and more than 230,000 fewer jobs added. Winegarden also contends that projected collections would fall well short of supporters’ $100 billion estimate and warns that using a one-time tax to fund ongoing programs creates a mismatch that could lead to broader tax increases or spending cuts, compounded by constitutional challenges and substantial administrative costs.

Washington

Heywood, Dhingra clash over Washington’s millionaire tax at Bellevue forum – KOMO News. At a Bellevue forum, Initiative 645 sponsor Brian Heywood and Washington Sen. Manka Dhingra (D) debated the state’s new millionaire tax. Dhingra defended it as a targeted way to make the tax system less regressive. Heywood and House Minority Leader Drew Stokesbary warned it could pave the way for a broader income tax. Initiative 645 would repeal the levy and prohibit state and local taxes on or measured by individual income. Opponents of repeal argue it would jeopardize public services and tax relief, citing an official estimate of $11.4 billion in lost revenue over fiscal years 2027–2031. Supporters counter that collections do not begin until 2029 and say the initiative would prevent future expansion.

Debating Initiative 645 – KIRO 7. Some business owners and real estate agents report that the millionaire tax is influencing relocation decisions. Sen. Manka Dhingra argues that Washington’s talent pool and quality of life will continue attracting employers and that the levy will make the state’s tax system less regressive. State projections cited by supporters estimate $3.57 billion in annual revenue beginning in 2029 for the general fund, family and small-business tax credits, child care and other purposes. Voters will decide its fate through Initiative 645 in November: a yes vote would repeal the tax, while a no vote would preserve it.

Oregon

Progressive groups, unions announce wealth tax initiative aimed at 2028 Oregon ballot – Washington State Standard. Oregon’s Fight for Our Future coalition, comprising progressive advocacy groups and major unions, has filed a proposed wealth-tax initiative targeting the November 2028 ballot to offset federal funding cuts and provide tax relief to lower-income residents. The measure would impose a 1%–1.2% tax on financial assets held by taxpayers with net worth of at least $30 million, affecting an estimated 4,500 households. The initiative would also offer a refundable income-tax credit of up to 30% to eligible lower-income filers. Advocates estimate the proposal would generate $1.5 billion in net revenue per two-year budget cycle after accounting for $1 billion in tax relief benefiting more than 1.3 million taxpayers. The coalition also hopes to pressure lawmakers ahead of the 2027 legislative session and must gather sufficient signatures to qualify the measure for the ballot.

Other

Three tax votes in November that will affect high earners – CNBC; Election Podcast: 2026 Ballot Measures Shaping State Taxes. Voters in California, Colorado and Washington will decide November ballot measures that could reshape taxes on high earners, reflecting a growing divide between efforts to tax wealth and competition to attract affluent residents. California’s Proposition 40 would impose a one-time 5% tax on billionaires’ net worth. Colorado’s proposal would replace its 4.4% flat income tax with graduated rates reaching 8.4%, while cutting taxes for lower earners. Washington’s Initiative 645 would repeal the new 9.9% tax on income above $1 million and prohibit future state and local income taxes. Supporters of higher taxes emphasize funding public services and tax relief. Opponents warn of business departures, reduced investment and wealthy-taxpayer migration.