The California State Capitol in Sacramento. Public domain photo via Wikimedia Commons.
California voters have rejected Proposition 40, a first-in-the-nation ballot measure that would have imposed a one-time 5 percent tax on the wealth of the state's billionaires, the Associated Press projected on Monday — a striking rebuke of the left's flagship tax idea in a state where Democrats swept almost everything else on the ballot.
With about 83 percent of ballots counted, the "no" vote led 52.8 percent to 47.2 percent, a margin the AP declared irreversible. The result came six days after Election Day on November 3, after the measure had trailed since the first results were reported.
What Proposition 40 would have done
The measure would have imposed a one-time 5 percent tax on the net worth of Californians worth more than $1 billion who were residents of the state on January 1, 2026, excluding real estate and some pension and retirement assets. About 200 billionaires would have paid, and sponsors estimated the tax would raise roughly $100 billion over five years — 90 percent of it earmarked for health care programmes, with the rest going to education, food assistance and administration.
The initiative was placed on the ballot by the healthcare workers' union SEIU-United Healthcare Workers West, which argued the money would offset federal health care cuts. Supporters, including Senator Bernie Sanders, Representative Ro Khanna and the California Democratic Party, had hoped the vote would launch a global debate on taxing billionaires.
A divided Democratic Party
The measure split California Democrats more visibly than almost any issue in recent memory. Outgoing Governor Gavin Newsom — a likely candidate for the 2028 Democratic presidential nomination — opposed it, as did Xavier Becerra, the Democrat elected governor on the same day. The "yes" campaign raised $33.5 million; opponents, led by Google co-founder Sergey Brin, spent a combined $378.4 million against it, one of the most expensive ballot fights in state history.
Brin also backed Proposition 42, a counter-measure that would ban retroactive taxes and prohibit new taxes based on ownership of financial assets. It was leading with 51.6 percent of the vote, though the AP had not yet called it. If it passes with more yes votes than Proposition 40 received, it would also have nullified the billionaire tax had it passed.
What the result means
The defeat stands out because it came in the middle of a Democratic wave. On November 3, California voters sent Becerra to the governor's office and helped Democrats take control of both chambers of Congress. Yet the same electorate that backed Democrats across the board said no to the most ambitious progressive tax proposal the state has seen in decades — and even in liberal San Francisco, the measure led by only about four percentage points.
Supporters now face the risk that the idea is permanently rejected in California law if Proposition 42 passes. The results remain unofficial until certified by the California secretary of state, with counting continuing into Monday.
At the same time, the vote was not a blanket rejection of higher taxes on the wealthy: about 60 percent of California voters approved another measure making existing higher income tax rates permanent for high earners, rather than letting them expire.
Sources: Associated Press, Le Monde, Al Jazeera.