California voters are rejecting the "billionaire tax" and backing Prop 42, a constitutional ban on new wealth taxes

California's "billionaire tax" is losing. In the Secretary of State's count as of November 5 at 6:58 p.m., Proposition 40 trails 45.4% to 54.6%, a gap of 799,305 votes. Proposition 42, the measure its opponents put on the same ballot, leads 53.4% to 46.6%. Proposition 41, the third measure in the set, trails 46.7% to 53.3%.

Prop 40 vs. Props 41 and 42: California's billionaire tax rule

Prop 40 needs a majority to pass, but if Prop 41 or Prop 42 gets more yes votes, the billionaire tax could be stopped in court. The constitutional rule, each measure's conflict clause, the three possible outcomes, the October polls and the dates in the count.

California TodayPat Sharyon | Editor

No news organization has called any of the three, and counting runs to November 16. But the shape of the result is already clear enough to matter to anyone who holds assets in California. If the count holds, the state does not just turn down a one-time 5% tax on billionaires. It adds an article to its Constitution that bars any new state tax on the ownership of personal property and savings, and any new retroactive tax, from January 1, 2026 onward. That is the part of this result that outlasts the election.

This piece sets out the count, what Prop 42 would write into the Constitution, why Prop 42's lead over Prop 40 in raw yes votes matters on its own, who paid for the three campaigns and the dates left before anything is final. For how the three measures were designed to collide, our earlier explainer on the most-yes-votes rule still stands; for the measure itself, start with what the billionaire tax is.

Prop 40 trails by 799,305 votes and Prop 42 leads by 585,425 in the November 5 count:

The Secretary of State's feed reports all 23,860 precincts partially reporting as of November 5, 2026, 6:58 p.m. Pacific time. "Partially" is the operative word: every precinct has sent something, but mail ballots that arrived on or just before Election Day, ballots dropped off at vote centers and ballots that need signature cures are still being processed across the 58 counties. The Secretary of State has not yet published its unprocessed-ballots report for this election; its June primary report, for comparison, counted 3.6 million ballots still to go two days after the vote.

Two things stand out in the table. The first is that Prop 40 is losing outright, by 799,305 votes in the current count. The second is that Prop 42 has 663,235 more yes votes than Prop 40 does (4,598,048 against 3,934,813), and even Prop 41, which is itself trailing, has 48,690 more yes votes than Prop 40. Those raw yes-vote gaps are our arithmetic from the feed and they matter for a reason explained below.

The money column uses the Fair Political Practices Commission's top-contributor aggregates, last modified November 5. The FPPC marks some contributions against more than one measure, which is why the "against" figures for Props 41 and 42 and the "for" figure for Prop 40 are the same money counted three times.

Proposition 42 would write a ban on new wealth taxes into the California Constitution:

Prop 42 calls itself the "Retirement and Personal Savings Protection Act of 2026" and adds a new Article VIII to the state Constitution. Its first section is the operative one:

No state law and no provision of this Constitution enacted on or after January 1, 2026, may enact, create, impose, or authorize collection of a tax on the ownership or control of retirement holdings, individually owned assets, and other forms of personal savings, whether held directly or indirectly.
Proposition 42, Article VIII, Section 1(a)

The definition is what gives the clause its reach. The measure's own definitions section says that "retirement holdings, individually owned assets, and other forms of personal savings" means:

• pensions and retirement accounts, including 401(k), 403(b) and all other individual retirement accounts;
• mutual funds;
• "all personal property, whether tangible or intangible, including, but not limited to, financial assets, investment accounts, business interests, digital assets, intellectual property, personal belongings, and other assets used to produce or collect income or savings for retirement or financial planning."

"Tax" takes its meaning from Proposition 26's definition in Article XIII A, so fees and charges that fall outside that definition are not caught. Real property is carved out in so many words; the article "shall not alter or affect the taxation of real property." Taxes already "in effect, imposed, and first collected on or before December 31, 2025" are untouched, which is why the Legislative Analyst's Office lists the vehicle license fee and county taxes on business equipment as examples of personal-property taxes that continue.

The LAO's summary of the effect is short: "new taxes on the ownership of financial assets or other personal property would not be allowed." Its fiscal note is shorter. The measure makes future tax increases "somewhat harder," and "When and by how much future revenues would be reduced is unclear." For a business reader the practical point is that the state's menu of future tax instruments loses a category. Income, sales, corporate and real-property taxes remain available to the Legislature and to future initiatives. A tax on what people and businesses own, as distinct from what they earn or buy, would require another constitutional amendment to undo Article VIII first.

Prop 42's retroactive-tax ban reaches taxes tied to past residency, which is how Prop 40 was built:

Section 2 of the new article bars any state law or constitutional provision enacted on or after January 1, 2026 from imposing "a tax that operates retroactively to result in tax liability based on conduct, activities, or a status that occurred or was present prior to the effective date." A second paragraph makes the point specific: the ban "also applies to a tax that is imposed on a taxpayer based upon their residency status on a date prior to the effective date of the tax."

Prop 40 taxes the net worth, as of December 31, 2026, of people who were California residents on January 1, 2026, ten months before the election and before the measure could take effect. Neither measure's text names the other, but Prop 42's residency paragraph describes that design exactly.

The retroactivity ban has one exception, and it is narrow. The Legislature (not an initiative) may pass a tax that reaches back no more than 365 days, and only when the Governor has declared an emergency (the text lists fire, flood, storm, civil disorder, earthquake, volcanic eruption and attack) or a fiscal emergency under Article IV, Section 10(f), with the revenue limited by statute to that emergency. Outside that window, from Prop 42's effective date forward, every new state tax applies only to conduct, activity or status after the tax takes effect.

The most-yes-votes rule means Prop 42 blocks Prop 40 even if Prop 40 recovers to a majority:

Prop 40 is trailing, so on the current count the most-yes-votes rule is not needed to defeat it. It matters because of what the rule does if late ballots move the count.

Article II, Section 10(b) of the Constitution says that when two approved measures conflict, "the provisions of the measure receiving the highest number of affirmative votes shall prevail." Prop 42's Section 5 declares that any same-ballot initiative imposing a tax on the ownership of personal savings, or a tax based on pre-effective-date conduct or residency, "shall be deemed to be in conflict with this measure," and that if Prop 42 "receives a greater number of affirmative votes, the provisions of this measure shall prevail in their entirety, and all the provisions of the other measure shall be null and void." The Voter Information Guide's own analysis puts it plainly: if Prop 42 gets more yes votes than Prop 40, Prop 40 "could be blocked from becoming law even if it also wins a majority."

So the billionaire tax has two counts to win, not one. It would have to climb from 45.4% to a majority, and then it would have to close a 663,235 yes-vote gap to Prop 42. Prop 40's own conflict clause does not help it here; that clause reaches only other measures that tax "net worth, not income, of billionaires," and Prop 42 is not one.

Prop 41 sits in the same frame. The LAO describes it as a measure under which the state "might not be able to exclude new special tax spending" from the constitutional spending limit, with State Auditor reviews of programs funded by initiative taxes. It trails 46.7% to 53.3%, so on the current count it fails on its own; its 48,690-vote yes lead over Prop 40 is academic unless both measures reach a majority. The site's Prop 41 guide and Prop 42 guide carry the full text of each.

Building a Better California spent up to $375.95 million across the three measures:

The FPPC's list shows one committee on one side of all three fights. Building a Better California is the top contributor against Prop 40 at $158,500,000, the top contributor for Prop 41 at $58,350,000 and the top contributor for Prop 42 at $159,100,000. Added together, that is $375,950,000, a ceiling rather than a total because the FPPC flags that some of the same contributions are counted against more than one measure.

On the other side, SEIU United Healthcare Workers West, the union that wrote Prop 40, is listed at $22,078,461.16 as the top contributor for Prop 40 and the top contributor against both Prop 41 and Prop 42. The aggregates for the committees at the top of each fight:

• Prop 40: $32.4 million in support, $169.8 million against;
• Prop 41: $58.4 million in support, $33.4 million against;
• Prop 42: $159.3 million in support, $33.4 million against.

The union has said it will be back. CalMatters reported that SEIU-UHW president Dave Regan vowed another attempt in 2028 if the Legislature "fails to deliver a real solution" on health care funding: "That's not a hypothetical. That's our plan." If Prop 42 is in the Constitution by then, a 2028 measure would need to be written as something other than a tax on the ownership of assets, or would need to repeal Article VIII first.

The count runs to November 16 and certification to December 11, and Prop 42 would take effect December 16:

Counties must report the count for all ballots, apart from a short list of exceptions, by Monday, November 16. They certify their own results by December 3, and the Secretary of State certifies the statewide result on December 11. Initiatives and constitutional amendments take effect on the fifth day after the Secretary of State files the statement of the vote, which puts Prop 42's effective date at December 16, 2026 if it passes; the measure's own Section 7 says it takes effect "at the earliest possible date" under Article II, Section 10 and is operative the same day.

If the count does flip Prop 40 to a majority, two more clocks start. The raw yes-vote comparison with Prop 42 becomes the decisive number at certification, and Prop 40's own text opens a 60-day window for a validation action in Sacramento County Superior Court, with a direct appeal to the state Supreme Court and target dates of April 1 and November 1, 2027 for the two courts. On the current count neither clock runs.

The business bottom line on the California billionaire tax and Prop 42:

As the count stands on November 5, California's first billionaire tax is failing by nearly 800,000 votes and the measure that would bar any successor is passing by nearly 600,000. The 5% one-time tax on net worth above $1 billion does not arrive with 2026 income-tax returns. In its place, if the lead holds to December 11, the Constitution gains a rule that no new state tax may fall on the ownership of pensions, retirement accounts, investments, business interests, digital assets or other personal property, and that no new state tax may reach back to conduct or residency before it took effect. The high-income income-tax rates that voters made permanent the same night under Proposition 3 are untouched by any of this; Prop 42 is about what Californians own, not what they earn. The results master guide carries the running count for all 14 measures and is refreshed from the Secretary of State's feed until certification.