California's billionaire tax appears headed for defeat

Summarised from 3 outlets · Updated 5 Nov, 01:09 · Archive

California's Proposition 40, a measure imposing a one-time 5% tax on billionaires, appears set to be rejected by voters.

California's Proposition 40, which would have imposed a one-time 5% tax on billionaires' assets, appears set to be rejected by voters in the midterms. The measure, backed by the Democratic Socialists of America, would have taxed businesses, securities, art, collectibles and intellectual property while exempting select pensions, real estate and retirement accounts.

Governor Gavin Newsom opposed the proposition, putting him at odds with the DSA over the policy. The disagreement highlights broader debates about wealth redistribution and concerns about capital flight. An economics scholar cited by Fox News said critics argue such taxes amount to 'an attempt to get money from people who create wealth and move it to the state'.

To prevent billionaires from leaving California to avoid the tax, Proposition 40 was designed to apply retroactively to those who were state residents on 1 January 2026. The DSA had promoted the measure to supporters, arguing that California 'has the money' for quality schools and healthcare if wealth is 'transferred from the wrong pockets to the right ones'.

How it is being reported

• Sure, California voters overwhelmingly backed Democrats. But they refused to punish success.California voters showed their pragmatic side on Election Day by rejecting Proposition 40, the so-called “billionaire tax.”New York Post · 5 Nov, 02:35
• Democratic wave keeps US wealth taxes on the agenda despite California setbackProposition 40 billionaire tax set to be defeated in a rare victory for mega-donors in the US midtermsFinancial Times · 5 Nov, 00:52
• Newsom breaks with socialists over billionaire tax as California voters appear poised to reject itCalifornia's Prop 40 billionaire tax pits the Democratic Socialists of America against Gavin Newsom, who backs a countermeasure to block it.Fox News · 4 Nov, 19:51

In this story: Gavin Newsom · Democratic Socialists of America · California

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