California Voters Reject Proposed Billionaire Wealth Tax
California voters rejected Proposition 40, a one-time 5% tax on billionaires' net worth, after a record-setting, tech-funded opposition campaign.
California voters have rejected Proposition 40, a first-in-the-nation ballot measure that would have imposed a one-time 5% tax on the net worth of the state’s billionaires, mostly to help fund health care, the Associated Press reported. The vote count was still continuing, with mail ballots postmarked by Election Day still arriving, and official final results had not been certified.
What happened
Proposition 40 would have applied a one-time 5% levy to residents with more than $1 billion in net worth who lived in California at the start of 2026, a group of roughly 200 people, according to Mission Local, a San Francisco news outlet. Most of the revenue would have gone to the state’s health care program for low-income residents, which faces a deficit of about $30 billion that backers blame on federal funding cuts. The rest would have supported education and food assistance.
Early returns showed the measure well behind. Bloomberg News, citing the AP, reported support of about 45% with roughly 60% of the expected vote counted. La Voce di New York, citing preliminary results, put it at 43.7% yes and 56.3% no with about 52% counted.
The measure also faced a second hurdle. Two rival constitutional amendments, Propositions 41 and 42, were placed on the ballot by opponents. Under California law, when conflicting measures both pass, the one with more yes votes prevails. Proposition 42, which would bar new state taxes on personal property and certain retroactive taxes, was passing with about 54% to 55% in the early counts, according to Bloomberg and La Voce di New York. Proposition 41 was trailing.
Who backed and opposed it
The Service Employees International Union-United Healthcare Workers West, a health care workers union, put the measure on the ballot. Senator Bernie Sanders of Vermont and U.S. Representative Ro Khanna of California supported it, Bloomberg reported. Mission Local also listed billionaires Tom Steyer and Jensen Huang, the chief executive of Nvidia, among its supporters.
Opponents included Gov. Gavin Newsom, San Francisco Mayor Daniel Lurie and the California Teachers Association, who argued the tax could drive wealthy residents and future tax revenue out of the state, according to the outlets. A committee called Building a Better California, funded by Google co-founder Sergey Brin and other billionaires, spent more than $300 million against the measure, Mission Local and Bloomberg reported. La Voce di New York put opposition spending at about $316 million. Mission Local reported that about 230 campaign staffers for the sponsoring union went on strike in the final week before the election.
Why it matters
The measure was closely watched in the technology industry because many of the people it would have taxed are founders and investors in Silicon Valley companies. Garry Tan, head of the startup accelerator Y Combinator, praised the opposition campaign, Bloomberg reported. The fight was also one of the most expensive in state history.
Dave Regan, president of the sponsoring union, said supporters would return in 2028 if needed, according to Bloomberg. Dan Schnur, a professor at the University of California, Berkeley, said the measure was “too much for some voters,” Bloomberg reported.
What comes next
Counting is expected to continue for days, and the results will not be final until counties certify them. Reports do not suggest that late ballots are likely to close a gap of this size, but the final margin and the outcome of Propositions 41 and 42 remain to be confirmed. Backers of the tax have signaled they may try again with a new measure.
