California voters reject one-time billionaire wealth tax amid outmigration concerns
Voters turned down a proposed one-time 5% tax on billionaire wealth, citing worries that the measure could prompt wealthy residents to leave the state.
California voters rejected a proposed one-time 5% tax on billionaire wealth that would have applied to residents as of Jan. 1, 2026, with payments spread over five years. Supporters of the measure, including Sen. Bernie Sanders and the Service Employees International Union–United Healthcare Workers West, said the tax could generate tens of billions of dollars for health-care programs and offset recent federal cuts.
Governor Gavin Newsom opposed the proposal, arguing that California should address wealth inequality without driving high-income individuals out of the state. Analysts noted that the defeat may reflect fears that the tax could expand beyond billionaires and encourage wealthy residents to relocate.
"A lot of messaging went around this: ‘You’re next.’ And I think that messaging resonated with people. This is most likely not a one-time tax. It’s not going to just stick to billionaires," said Wayne Winegarden, senior fellow at the Pacific Research Institute.
Winegarden added that voters were concerned about potential budget losses if billionaires left, saying, "People were nervous that you’re going to lose money off of this because of billionaires leaving. The macroeconomic impacts of the wealth tax meant that the rest of the budget was going to have less money."
The vote coincided with a separate ballot measure, Proposition 42, backed by tech billionaires, which seeks to block new taxes on personal property and could make future attempts to tax billionaire wealth more difficult.
Recent data show that California continues to lose high-income taxpayers to other states. Los Angeles County recorded a net loss of 17,496 tax filers, taking nearly $1.9 billion in income elsewhere, with similar outflows reported in Orange, San Diego, Riverside and San Bernardino counties. The defeat of the billionaire tax ends the latest effort to impose such a levy, but the broader debate over the state's tax competitiveness and ability to retain wealth and investment remains unresolved.