California voters reject a 5% tax on billionaires' net worth in Proposition 40 vote

Result and count

California voters have rejected Proposition 40, a one-time 5% tax on the net worth of residents worth more than $1 billion, which would have been the first measure of its kind in the nation. The Associated Press determined on Monday, 9 November, that the 'no' side had enough votes to win. Voting took place on 3 November, but ballots that are postmarked by Election Day still count when they arrive up to a week later, so the outcome took nearly a week to settle. At the Monday tally, with 83% of the estimated vote counted, the measure trailed 53 to 47.

Money and the campaign

Opponents outspent supporters by a wide margin. The AP reported that the 'no' side raised roughly 10 times as much as the 'yes' side, and Google co-founder Sergey Brin alone put more than $100 million into a political action committee working to defeat the measure. Bloomberg put the gap at more than 11 to one. El Mundo reported that the opposition spent about 425 million dollars, describing the campaign as the most expensive around a legislative proposal in California's history. Opponents included Governor Gavin Newsom and former congresswoman Katie Porter, who argued that the tax would push the wealthiest residents to leave the state. The New York Times reported that several tech moguls had already moved out of California to avoid the tax, and that billionaires aired television ads claiming it could expand beyond the superrich. Support came from the California Democratic Party, several unions and Vermont Sen. Bernie Sanders, who rallied in cities across California during the closing weeks.

What the measure would have done

The tax was built to offset federal healthcare cuts. SEIU United Healthcare Workers West, which backed the measure, said it was needed to replace an estimated $100 billion the state will lose in federal healthcare funding over five years. Under the proposal, most of the revenue would have gone to healthcare, with 10% directed to education and food-assistance programs. Europa Press reported that about 250 billionaires would have been affected. According to El Mundo, the idea took shape in late summer 2025, when the union commissioned a design from a group of academics led by economist Emmanuel Saez of Berkeley. Levy, an economist at the University of California, Berkeley, said the outcome points to a wider reluctance to pass wealth taxes.

The conditions were probably the best they could have been to get this to pass, and even then it failed.

Political fallout

The New York Times described the result as a setback for the progressive push to change taxation in the United States, noting that a policy at the heart of that agenda could not win a bare majority in one of the country's most liberal states. Whether Democrats read the loss as a one-off or as broader resistance to taxing wealth will shape the debate ahead of the party's next presidential primary. The Yes on 40 campaign said in a statement on Monday that the billionaires had bought a temporary victory but had not ended the debate.

Buying an election is not the same as winning the debate.

The campaign said it would return a tax to the ballot in 2028 if patients were not protected.