With the 2026 midterm elections now less than two months away, Kalshi’s political prediction markets are attracting increased trading volume across the board. One market in particular, California’s Proposition 40, has experienced volatility since it originally opened in December 2025.
The “Billionaire Wealth Tax Act” (which will appear on ballots as Proposition 40) would levy a one-time 5% tax on most assets owned by the wealthiest individuals who reside in California. Kalshi traders are anxious to know whether Proposition 40 has a legitimate possibility of passing, not because they will be impacted by it, but because they have real money riding on the outcome.
The exact terms of this market are as follows: the Kalshi market will resolve as “yes” if Proposition 40 passes on November 3rd, based on official results provided by the California Secretary of State. The outcome of this specific market is NOT contingent on the results of any other ballot initiative, even if it directly opposes Proposition 40.
The “yes” contracts for the California Billionaire Wealth Tax are available for 33¢ each. They peaked at nearly 50¢ in early January, but have since come down to reflect recent polling that’s tied to Proposition 40.
Traders who want to buy the “no” options can pick them up for 69¢ apiece. These contracts were priced as high as 83¢ in mid-June, but have likewise leveled off as a result of publicly available commentary.
Our pick is that Proposition 40 will not pass. It’s opposed by California Governor Gavin Newsom, and opposition forces have organized over the past few months to make their case for why the Billionaire Wealth Tax shouldn’t pass in November.
Ninety percent of the proceeds from the California Billionaire Wealth Tax Act would, if passed, go toward funding health care initiatives, according to the state Legislative Analyst’s Office. As one might expect, the ballot initiative enjoys staunch support from the Service Employees International Union – United Healthcare Workers West (SEIU-UHW) labor group.
However, California Governor Gavin Newsom and other high-profile Democrats have voiced their opposition to the measure. Moreover, the Los Angeles Times Editorial Board came out against Proposition 40 this past Sunday, further dampening the Billionaire Wealth Tax Act’s chances of passing.
Even if Proposition 40 passes on November 3rd, it could still be nullified. Namely, Proposition 41 and Proposition 42 are in direct conflict with the Billionaire Wealth Tax Act. If either of those measures receives a larger volume of “yes” votes compared to Prop. 40, then the one-time tax will be automatically nullified.
While many Californians agree that health care remains a core issue for a large percentage of constituents, the mechanisms that should be put in place to address those concerns are hotly debated. Proposition 40 will appear on the ballot in California on Tuesday, November 3rd. To date, the Prop. 40 market has attracted more than $860,000 in total trading volume on Kalshi.
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