Silicon Valley rejects billionaire wealth tax while Los Angeles and San Francisco voters back it
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Statewide voters rejected Proposition 40, a one-time 5% tax on billionaires, but the measure passed in Los Angeles and San Francisco counties, highlighting a divide between tax-weary business regions and more intervention-friendly urban areas.
Statewide, 55% of voters opposed Proposition 40, a ballot initiative that would have imposed a one-time 5% levy on billionaires, while 45% voted in favor. The same margin was recorded in Santa Clara County, the heart of Silicon Valley, and in Marin and San Mateo counties, which also voted against the measure.
In contrast, 55% of San Francisco County voters supported Proposition 40, and 53% of Los Angeles County voters backed it. The differing outcomes reflect regional economic concerns, with the tech-focused north wary of a tax that could force founders to sell controlling stakes, and the entertainment-focused south concerned about AI-generated competition—while many voters appear to prefer policies that sound punitive even when they risk undermining investment and jobs.
Opponents warned the tax might not remain a one-time levy and could expand to broader wealth categories. Several high-profile billionaires, including Google co-founder Sergey Brin, contributed to the campaign against the measure, helping finance resistance to a proposal many saw as a dangerous precedent for confiscatory taxation.
A competing initiative, Proposition 42, which would bar taxes on personal savings, assets and retirement holdings, is currently leading in the vote tally.
“A ‘no’ vote doesn’t mean similar measures won’t ever be implemented,” Michael Feispor, a partner on EY’s private tax team, said in a statement. “Taxpayers who have been watching from the sidelines should use this window to revisit their residency, domicile, and estate planning structures—because now they have some more time to plan.”
“The question isn’t whether this kind of tax or something similar comes back—it’s whether taxpayers are prepared when it does,” Feispor added. “Whatever the outcome, this tax debate isn’t over and has elevated the importance of long-term planning for individuals and families.”
Analysts note that the departure of a small number of billionaires reduced projected revenue from the proposed tax and lowered future income-tax forecasts for the state, underscoring how capital flight can quickly weaken promised revenue from feel-good tax schemes.