California voters reject Proposition 40, the one-time billionaire tax
Seven Lights
California voters rejected Proposition 40 on Monday, a ballot measure that would have imposed a one-time five per cent tax on the wealth of billionaires, news organizations projected as polls closed.
The measure would have levied a one-time tax of five per cent on net worth above one billion dollars as of January 1, 2026, excluding real estate and certain retirement assets. Its sponsor was the healthcare union SEIU-United Healthcare Workers West. Proponents said it would generate about 100 billion dollars over five years, with 90 per cent directed to healthcare programs and the remainder to education, food assistance and administration of the tax.
The opposition raised nearly 425 million dollars, the most spent against any measure in state history, according to campaign finance filings. The biggest donor by far was Google co-founder Sergey Brin, who contributed at least 132 million dollars, and most of the money flowed to the group Building a Better California, which had raised more than 250 million dollars by late October. Donors included executives from Google, Palantir, DoorDash, Stripe and Reddit, and several prominent venture capitalists. Governor Gavin Newsom also opposed the measure.
The campaign gave the wealth-tax debate its most concrete test in the United States. A Stanford University study found that billionaires who had already left the state, including Mr. Brin, Larry Page and Peter Thiel, had removed about 540 billion dollars, or 30 per cent, of California’s billionaire wealth from potential taxation. The same study concluded the measure might raise only about 30 billion dollars rather than the 100 billion dollars its proponents projected.
Supporters had cast the tax as a remedy for federal retrenchment, pointing to healthcare cuts in President Trump’s One Big Beautiful Bill Act. Opponents said the levy was an open invitation for government to expand and warned of further taxes to come.
The defeat settles the most expensive ballot fight in California history, though the count of some mail ballots will continue for weeks. Two rival measures, Propositions 41 and 42, sought to block or reverse the tax and were also expected to fail. Advocates said the no vote leaves a hole in the budget that legislators would have to close by other means.