California voters reject billionaire wealth tax amid costly campaign
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Proposition 40, which would have imposed a one-time 5% tax on the assets of California billionaires to fund healthcare, was rejected by about 56% of voters, while the race remains too close to call as counting continues.
California voters have turned down Proposition 40, a measure that sought to levy a one-time 5% tax on the assets of the state’s billionaires to fund healthcare. Preliminary results show roughly 56% opposed the proposal and 44% supported it, though about 6 million ballots are still pending, leaving the final outcome uncertain.
The campaign became one of the most expensive ballot-measure fights in the state’s history, with opponents outspending supporters by a wide margin. Funding data from the secretary of state indicate that more than $380 million was spent to oppose the tax, compared with about $100 million raised by proponents, including the Service Employees International Union-United Healthcare Workers West.
Supporters, such as the healthcare union that initiated the measure, argued the tax would raise roughly $100 billion to offset federal cuts to Medicaid and other health programs. Opponents, including Governor Gavin Newsom, the teachers union, Planned Parenthood, business groups and several tech billionaires, warned that the tax could drive wealthy residents out of the state and labeled it a risky experiment.
“In a deep blue state like California, most voters are going to support additional funding for healthcare, especially to replace Trump funding cuts. But in retrospect, the sponsors may wish they’ve been a little bit less ambitious,” said Dan Schnur, a politics and communications professor at USC, UC Berkeley and Pepperdine.
“When billionaires have half a dozen different strategies for buying this election, it shows that they already have too much money and pay too little back,” said Brian Galle, a UC Berkeley law professor who helped draft the proposal.
“They didn’t just reject a single bad tax idea — millions of Californians backed the strongest protections available to protect their hard-earned life savings from double taxation,” said Nathan Click, a spokesman for Proposition 42, a related measure that would block new taxes on personal savings.
The measure also faced competition from Proposition 41, which would have required audits of new state special taxes and was trending toward defeat. Analysts noted that taxing assets rather than income can be complex and may have contributed to declining public support, which fell from 48% in August to 42% in a recent poll.
Regardless of the final count, the debate has highlighted ongoing discussions about wealth inequality and the role of ultra-wealthy individuals in state politics.