**Strong opposition from Governor Gavin Newsom and well-funded countermeasures have shaped trader expectations that Proposition 40, the one-time 5% wealth tax on California billionaires, will not take effect.** The measure qualified for the November 3, 2026 ballot after SEIU-UHW gathered sufficient signatures, but it faces two rival initiatives—Propositions 41 and 42—backed by substantial spending from opponents including Google co-founder Sergey Brin. These measures would nullify Prop 40 if they receive more yes votes, even if Prop 40 secures a simple majority. Newsom endorsed Prop 42 in early October, which would ban new taxes on personal property and retroactive levies. Recent polling from the Public Policy Institute of California shows Prop 40 at roughly 52% support among likely voters, competitive with or trailing the countermeasures, while opponents have raised over $205 million against it. Implementation challenges, litigation risks tied to the retroactive January 1, 2026 residency rule, and concerns over tax flight and budget volatility further support the current 74.5% implied probability for “No.”