California voters reject proposed billionaire wealth tax
Opponents, including tech executives and Governor Gavin Newsom, campaigned against the measure, which backers said would fund public healthcare.
Key points
- California voters rejected Proposition 40, a proposed one-time 5% tax on residents with a net worth above $1 billion
- The measure was backed mainly by labor unions and opposed by Governor Gavin Newsom and tech figures
- Opposition spending reached a reported nearly $425 million, the most expensive in state history
- Supporters said the tax would fund Medi-Cal and other programs; critics warned of capital flight
California voters have rejected Proposition 40, a proposed one-time tax on the state’s billionaires. The Associated Press reported the result on Monday, according to TechCrunch. The Guardian also reported that the measure was defeated.
The proposal would have created a 5% wealth tax on state residents with a net worth above $1 billion. It would have applied to people living in California on 1 January 2026. Supporters said the revenue would mainly pay for public healthcare, including Medi-Cal, the state’s Medicaid program for qualifying low-income residents, along with some education and food assistance.
A costly campaign
The campaign was the most expensive in California’s history. Opponents spent a reported total of nearly $425 million, according to The Guardian, citing campaign finance filings. Google co-founder Sergey Brin was the largest single donor, giving at least $132 million.
Among the financial backers of the opposition were leaders from Google, Palantir, DoorDash, Stripe and Reddit, as well as a number of well-known venture capitalists. Spending in the first two weeks of October passed $2.5 million a day, the filings showed.
Opponents also backed two counter-measures, Proposition 41 and Proposition 42. Proposition 41 targeted the billionaire tax directly. Proposition 42 would have limited certain new taxes and banned any tax on billionaire wealth. Supporters called both measures “poison pills.”
Supporters and critics
Labor unions led the campaign for the tax. The healthcare union SEIU-United Healthcare Workers West sponsored it. Vermont senator Bernie Sanders and California congressman Ro Khanna also backed the measure. Supporters presented it as a response to healthcare cuts linked to Trump’s One Big Beautiful Bill Act.
Governor Gavin Newsom opposed the measure. Both the Democratic and Republican candidates for governor also opposed it. Planned Parenthood Affiliates of California, the political advocacy arm of the healthcare group, also came out against the measure. It objected that the tax was a single payment that would fund only certain health services.
Opponents called it “an everyone tax.” Before the vote, business leaders online often argued that wealthy residents would leave the state. Some critics also said the tax would discourage investment in startups. Florida-based venture capitalist Nic Carter, who told TechCrunch he supported such taxes elsewhere, was among those who made similar points.
What the result means
Supporters had hoped the measure would be a model for other states. The Guardian reported that the result could slow momentum for similar proposals nationwide. Whether other states will move ahead with new taxes on the ultra-wealthy remains unclear.
An analysis published before the vote claimed the tax would have lost the state money over time. Supporters had projected it could raise as much as $100 billion over five years. Those figures were disputed, and the sources do not settle which view is correct.
Frequently asked questions
What was Proposition 40 in California?
Proposition 40 was a ballot measure proposing a one-time 5% tax on state residents with a net worth above $1 billion. Supporters said it would fund healthcare, education and food assistance programs.
Who opposed the California billionaire tax?
Governor Gavin Newsom, both major candidates for governor, and many tech executives and venture capitalists opposed it. Opponents said it would drive wealthy residents out of the state.
How much was spent on the Proposition 40 campaign?
According to The Guardian, citing campaign finance filings, opponents spent a total of nearly $425 million. It was the most expensive opposition campaign in Californiau0026#039;s history.
Sources
- TechCrunch: California’s proposed ‘billionaire tax’ fails to pass
- The Guardian: California voters fail to pass proposed one-time tax on billionaires’ wealth
This article was written with the help of AI from reports by the outlets listed above. See our Editorial Policy. Spotted a mistake? Tell us.
