California voters reject one-time tax on billionaires' wealth
California voters defeated Proposition 40, which would have imposed a one-time 5% tax on the wealth of the state's billionaires. The campaign against it was the most expensive opposition effort in state history.
Voters in the US state of California have rejected Proposition 40, a ballot measure that would have levied a one-time tax on billionaires' wealth. The outcome could slow efforts in other states to introduce new taxes on the very wealthy, as well as the wider push for billionaires to pay a larger share.
What the measure proposed
The proposal was sponsored by the healthcare workers' union SEIU-United Healthcare Workers West. It called for a one-time 5% tax on every California resident whose net worth exceeded $1bn on 1 January 2026. Revenue was to go to healthcare programs, plus some education and food assistance. Supporters presented it as an answer to deep healthcare funding cuts resulting from President Donald Trump's One Big Beautiful Bill Act.
Backers and opponents
The state's major unions and progressive politicians, including Vermont senator Bernie Sanders and California congressman Ro Khanna, supported the measure. Both the Democratic and Republican candidates for governor opposed it, as did Planned Parenthood Affiliates of California. Critics pointed to the one-off design and the fact that it would fund only certain healthcare programs. Governor Gavin Newsom, a Democrat, steadfastly opposed it.
The most vocal critics were the billionaires themselves, who argued it was in reality "an everyone tax".
A record-setting campaign
Donors to the opposition included executives from Google, Palantir, DoorDash, Stripe and Reddit, along with several prominent venture capitalists. The largest contributor was Google co-founder Sergey Brin, who gave at least $132m, according to campaign finance filings. In total, opponents spent nearly $425m, and in the first two weeks of October spending exceeded $2.5m a day.
The strategy also included two counter-measures on the ballot. Proposition 41 directly targeted the billionaire tax, while Proposition 42 would limit certain new taxes and ban any taxation of billionaire wealth. If either received more yes votes than Prop 40, the billionaire tax would not take effect even if it passed. Supporters of the tax called them "poison pills".
