California Gov. Gavin Newsom has thrown his support behind a ballot measure that would effectively neutralize a separate proposal to tax the state’s billionaires.
Newsom endorsed Proposition 42, which would prohibit retroactive taxes that Proposition 40, known as the Billionaire Tax Act, would otherwise impose on California billionaires.
Proposition 40 would target any billionaire who lived in California as of January 1, 2026, making the timing of the competing measures especially significant heading into the election.
Proposition 42 was funded by billionaire and Google co-founder Sergey Brin, who has positioned the measure as a vehicle to defeat the billionaire tax before it can take effect.
Beyond blocking retroactive taxation on the wealthy, Proposition 42 would also ban new taxes on personal property, including pensions and 401K accounts before retirees begin drawing income from them.
The measure would extend its protections to a broader range of investments, framing itself as a shield for ordinary Californians saving for retirement, not just the ultra-wealthy.
“We all agree that Californians deserve to have their retirement and life savings protected from new state taxes so those savings are there when they need them,” Newsom said in a statement released by the proponents of the measure.
The Billionaire Tax Act itself would impose a 5 percent tax, directing 90 percent of collected revenue toward healthcare programs and the remaining 10 percent toward food assistance or education-related programs.
Newsom has been a consistent and vocal critic of Proposition 40, arguing that a billionaire tax should be a federal initiative rather than a state-level policy.
“I will continue to oppose the November measure because I believe California’s budget belongs to all Californians,” Newsom stated, drawing a clear line between his support for Proposition 42 and his broader fiscal philosophy.
His endorsement of Proposition 42 signals a strategic effort to let voters decide the fate of billionaire taxation through a competing measure rather than a direct legislative fight.
The dueling propositions set up one of the more unusual ballot dynamics in recent California history, with two measures directly working against each other before the same electorate.
