On 5 October, Bernie Sanders stood before a crowd in Los Angeles and urged Californians to vote for a one-time 5% levy on the wealth of billionaires. The same day, across the state in La Palma, opponents filled a union training hall to argue the opposite. Two rallies, one ballot measure, and underneath both a single question: can a democracy still tax the people who have the most to lose from it?
That question has hung over the midterms more quietly than the usual fights over immigration, prices and the president, and it deserves a louder hearing. Elections are the visible proof that American democracy is alive. Whether it still has the strength to act for a majority is a different matter, and the answer may depend less on who wins Congress than on what the winners dare to ask of the very rich.
A fortune beyond the reach of the taxman
The numbers need little decoration. According to the figures cited by the Guardian's Eduardo Porter, the top 1% of Americans hold more than 31% of the country's total wealth, roughly $55tn. Income tax, the main instrument the state uses to collect from its citizens, barely touches the wealthiest, because their gains pile up in assets that are not sold, not taxed and, in many cases, passed on at death.
One recent research paper, Porter notes, found that the 384 richest Americans paid 24% of their economic income in 2025. The average taxpayer paid 30%. Porter also points to earlier ProPublica reporting that scrutinised the finances of several of the country's most prominent fortunes, including those of Warren Buffett, Michael Bloomberg, Jeff Bezos and Elon Musk, and found that what they handed over to the Treasury was strikingly modest next to what they owned. None of this comes from a pamphleteer on the fringe; reporters and academics worked from the data.
There is an old argument that a democracy cannot stay healthy when a sliver of its citizens can buy exemption from its obligations. Americans have heard versions of it since the Gilded Age, and Theodore Roosevelt made it a campaign theme in 1910. What has changed is scale, and the sheer difficulty of the remedy. A century ago, a progressive income tax could reach the rich. Today the rich have learned to look poor on paper.
California's gamble
Hence Proposition 40. The measure would impose a single 5% charge on the net worth of billionaires who were California residents on 1 January this year. Forbes counted 260 of them as of early October, with nearly $2.5tn between them. On those figures, the analysis puts the haul at around $110bn, much of it earmarked to replace Medicaid money stripped out by last year's One Big Beautiful Bill Act.
Six Nobel-winning economists, all on the left, endorsed it in an open letter that calls it the "first-ever tax on billionaire wealth enacted anywhere in the world." They predicted it would spark copycat efforts in other states and eventually in Washington. The letter went further and suggested the vote could be seen as a turning point between democracy and oligarchy. That is a heavy load for one ballot line to carry, and I'd treat the grander forecasts with caution, since policy experiments in one state have a habit of staying in that state.
Nor are the skeptics all cranks or lobbyists. Governor Gavin Newsom, widely expected to seek the Democratic presidential nomination in 2028, opposes the measure. So does Xavier Becerra, the Democrat hoping to succeed him in Sacramento. Their worry is the familiar one: tax the fortunes and the fortunes leave, taking jobs, philanthropy and future revenue with them.
What the flight data says
The economists have an answer, and it rests on timing. Word of the proposed initiative reached the public in late November 2025, and the tax applies to residency as of 1 January. Their letter argues that the window was too short for many billionaires to cut ties with California. The evidence so far leans their way, at least modestly. Between January and October the state's billionaire count rose by 20, and their collective wealth grew by about $400bn this year alone.
Suggestive, then, but no verdict. A one-time levy on people who were already counted is one thing. A permanent regime that invites a billionaire to relocate before the next assessment is another, and nobody has yet tested what happens in year two.
What the vote cannot settle
Whatever the tally shows, Proposition 40 will be read as a referendum on more than California's budget. Supporters will say voters were asked to make the rich contribute and answered plainly. Opponents will say the state flirted with a dangerous precedent. Either reading flattens a messier truth: a single measure, funded and fought over by people with very different stakes, says about as much about national appetite for wealth taxes as one county's turnout says about a presidential race.
Still, the underlying problem will not wait for a clean mandate. If the wealthiest Americans can structure their affairs to pay a smaller share than a nurse or a plumber, the damage goes beyond the fiscal and into belief. A citizen who suspects the rules bend for the powerful has less reason to vote, to comply, or to trust the people who claim to be fixing it. Porter's argument, stripped of its heat, is that fairness is a precondition for consent, and consent is what holds the whole structure up.
That helps explain why the midterms feel oddly incomplete as a gauge of democratic health. Turnout, ballot access and the conduct of losers matter enormously, and they have drawn most of the attention. But a democracy can run clean elections and still produce policy that its voters see as rigged. The two failures differ, and the second is harder to repair with a recount.
Watch what the new Congress does with the Medicaid gap, and watch whether other states, already eyeing California's ballot, draft their own versions. If they do, the argument over taxing billionaires moves from a West Coast curiosity into the ordinary business of governing. If they don't, the rich will have won something larger than a single vote: the assumption that nothing can be done.