California voters reject one-time wealth tax on billionaires

Summarised from 6 outlets · 7 reports · Updated 10 Nov, 03:26 · Archive

California voters have rejected Proposition 40, which would have imposed a one-time 5% tax on residents with a net worth exceeding $1 billion.

California voters have rejected Proposition 40, a proposed one-time 5% tax on residents with a net worth exceeding $1 billion. The measure was rejected by 52.8% to 47.2%, according to the Associated Press. Had it passed, it would have been the world's first wealth tax targeting billionaires.

Proposition 40 would have imposed the tax on all individuals in California with a net worth of more than $1 billion, excluding real estate and certain retirement assets. The measure was sponsored by the healthcare union SEIU-United Healthcare Workers West, which argued it would generate approximately $100 billion over five years. Under the proposal, 90% of the revenue would have gone toward healthcare programmes, with the remaining 10% allocated to education, food assistance and administration of the tax.

Supporters framed the measure as a solution to drastic healthcare cuts resulting from federal policy changes in 2025 under what was called the 'One Big Beautiful Bill Act'. They argued that the ultra-wealthy accumulate substantial wealth from stock market and business valuations without paying income tax on those gains until realised, and that those who have benefited most from California's robust economy should contribute more toward public services. Progressive politicians including Vermont Senator Bernie Sanders and California Congressman Ro Khanna backed the proposal.

The campaign split traditional Democratic allies. Whilst the California Democratic Party and major labour unions supported the measure, Governor Gavin Newsom steadfastly opposed it. Other opponents included both Democratic and Republican gubernatorial candidates and organisations such as Planned Parenthood Affiliates of California, which cited concerns about the measure's one-off structure and its limitation to specific healthcare programmes.

Opposition from billionaires proved particularly influential. Donors to the opposition campaign included executives from Google, Palantir, DoorDash, Stripe and Reddit, along with prominent venture capitalists. Google co-founder Sergey Brin gave more than $100 million to a political organisation funding ballot measures to block the tax. Newsom expressed concerns that the measure could cause the wealthy to leave California and reduce crucial income tax revenue. Some billionaire critics spent millions opposing the measure, with a handful reportedly relocating to evade a potential tax.

The campaign became the most expensive in California's history. Opponents characterised the billionaire tax as an 'everyone tax', whilst supporters presented it as addressing economic inequality and the political influence of the billionaire class. In traditionally blue counties, the measure found stronger support, with San Francisco County and Los Angeles County seeing 56.2% and 55% of voters respectively in favour of Proposition 40.

Despite voter concern over the cost of living being the top issue in the election, California voters approved a variety of other taxes, particularly at the local level. In San Francisco, voters passed a parcel tax for the Muni transport system. The broader Bay Area approved sales tax increases for BART and other transit agencies. San Diego voters appeared to pass a 0.5% county sales tax increase. Los Angeles voters approved a 0.5% sales tax increase for the fire department. The result could hamper nationwide momentum on demands that billionaires pay their fair share and states enacting new laws to tax the ultra-wealthy.

How it is being reported

• California voters reject proposed one-time tax on billionaires' wealthCalifornia voters have rejected a proposed 5% tax on the net worth of billionaires, handing a victory to tech leaders who poured hundreds of millions of dollars into defeating the measure. The defeat of Proposition 40 also marks a setback for progressives seeking to tax the wealth of the ultra-rich.France 24 · 10 Nov, 03:19
• California voters officially reject controversial billionaire tax in setback for progressive agendaCalifornia voters just torpedoed a controversial, would-be historic wealth tax on billionaires. Proposition 40 –– a measure that would have imposed a first-in-the-nation one time 5% tax on billionaires –– was rejected by Californians by 52.8% to 47.2%, according to the Associated Press on Monday. Keith Anthony Sakura joins supporters at the Billionaire Tax Now...New York Post · 10 Nov, 03:14
• Californians reject wealth tax for billionairesProposition 40 targeted Californian billionaires with a 5% tax on their total wealth, including assets such as shares as well as income.BBC News · 10 Nov, 03:10
• California voters defeat billionaire tax proposal that divided DemocratsThe novel proposal would have charged billionaires a one-time 5% tax on most of their overall wealth, including their ownership in companies.NPR · 10 Nov, 03:05
• California voters fail to pass proposed one-time tax on billionaires’ wealthCampaign over Prop 40, as measure was known, was most expensive in state history, flush with Silicon Valley dollars California billionaires won a contentious ballot measure campaign, defeating a proposed one-time tax on their wealth. The bruising campaign over Proposition 40 was the most expensive in state history and witness to back-and-forth dealing from tech billionaires and democratic leaders, including Gavin Newsom, the governor, who steadfastly opposed the measure. While supporters of Prop 40 cast it as a solution to drastic healthcare cuts from Trump’s One Big Beautiful Bill Act…Guardian World · 10 Nov, 02:54
• California voters reject billionaire wealth tax, CBS News projectsVoters in California have rejected a tax on the state's wealthiest residents, CBS News projects, following a campaign that has split traditional allies and shattered spending records for a tax-related measure in California.CBS News · 10 Nov, 02:45
• California voters say they can’t afford to live here. Yet they keep voting to make life more expensiveVoters rejected the “billionaire tax” in California — but approved a variety of other taxes, especially at the local level. It was a remarkable result in an election in which voters constantly said that the cost of living was the top concern. California politicians complain about “affordability,” then make the state more unaffordable. And with...New York Post · 8 Nov, 22:02

In this story: California · Gavin Newsom · Sergey Brin · SEIU-United Healthcare Workers West · Google · Bernie Sanders · Donald Trump

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