Rep. Ro Khanna (D-Calif.) says the Democratic Party has a choice to make on Proposition 40, and it isn't a subtle one: billionaires or working-class Californians. He's betting his party picks the latter, and he's making that case loudly.

In a post on X on Sunday, Khanna shared a video clip in which he said, “Will the Democratic Party stand with the donor class, or with the working class? Are we going to stand with 250 billionaires in California, or with poor kids who need healthcare?”

Khanna's Warning

The stakes, per Khanna, are enormous. He said 3.5 million Californians could lose their health care coverage and 150,000 health care providers could lose their jobs if the measure fails. “People call them a ‘special interest’ — I call them nurses, doctors, technicians, people who work at rural hospitals,” he said, urging a “yes” vote on Prop 40 to “tax these billionaires to pay for healthcare.”

What Prop 40 Would Do

Here's the mechanics. Proposition 40 would impose a one-time 5% wealth tax on billionaires who were California residents as of Jan. 1, 2026, with payments due in 2027 and the option to spread them over five years. Real estate, pensions and retirement accounts would generally be excluded. The measure, which voters will decide on Nov. 3, would apply to more than 200 billionaires in the state.

The proposal has drawn opposition from several prominent tech billionaires, with some reportedly spending heavily to defeat it, while supporters have framed it as a way to fund health care coverage for millions of residents.

California's nonpartisan Legislative Analyst's Office has said the tax could temporarily generate tens of billions of dollars over several years, while potentially reducing state income-tax revenue by less than $1 billion annually if some billionaires leave the state. Business leaders have separately warned the tax could prompt an exodus of entrepreneurs from California.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by MarketDash editors.