California voters reject Proposition 40, a one-time 5% tax on billionaires' wealth

What voters decided

California voters rejected Proposition 40, a ballot measure that would have imposed a one-time 5% tax on the net worth of residents above $1 billion as of 1 January 2026. The Associated Press determined the result on Monday, 9 November, because California counted mail ballots at a deliberate pace. The gap narrowed as more ballots were tallied, but the measure ultimately fell short. Most of the revenue would have backfilled federal healthcare cuts, with 10% directed to education and food-assistance programs. The state has about 200 billionaires, including Meta's Mark Zuckerberg, Kim Kardashian and Oprah Winfrey, according to the BBC.

Who backed and opposed the tax

The healthcare union SEIU-United Healthcare Workers West sponsored the measure, arguing it was needed to replace an estimated $100 billion the state will lose in federal healthcare funding over five years. Bernie Sanders, the Vermont senator, rallied in cities across California in the closing weeks, and Ro Khanna, a California congressman, also backed it alongside the state's unions. The California Democratic Party endorsed the tax. Gov. Gavin Newsom opposed it, as did both the Democratic and Republican candidates for governor and Planned Parenthood Affiliates of California, a lobbying branch of the healthcare group. Opponents said the one-off structure would fund only certain healthcare programs and described the levy as "an everyone tax".

An expensive fight

Opponents mounted a campaign of nearly $425m, the most expensive in state history according to the Guardian. Donors included executives from Google, Palantir, DoorDash, Stripe and Reddit, along with several prominent venture capitalists. Sergey Brin, a Google co-founder, was the largest donor, contributing at least $132m according to campaign finance filings. Spending surpassed $2.5m a day in the first two weeks of October. The no side raised roughly 10 times as much as the yes side. Opponents also placed two counter-measures on the ballot, Proposition 41 and Proposition 42, and the Building a Better California political action committee raised more than $333 million, nearly a third of it from Brin.

Total opposition spending (nearly)425

Sergey Brin donation (at least)132

Total opposition spending (nearly)

425 USD millions

Sergey Brin donation (at least)

132 USD millions

Data from the article text

Key dates and the campaign's tactics

The tax applied to residents whose net worth exceeded $1 billion as of 1 January 2026, the date that set the threshold. Opponents ran attack ads on television throughout October, according to the New York Times. Supporters of the measure had a weaker coalition and relied on cheaper methods such as social media and influencer campaigns, which could not match the ads. The race was not called until Monday, 9 November, when the AP determined the result.

Billionaires and the wider debate

Brin and fellow Google co-founder Larry Page had started cutting ties with the state in anticipation of the tax, according to the Independent. Mark Zuckerberg said he would remain in California for eight years and made a deal with Meta to help pay the tax without losing his ownership stake in the company. The measure was the nation's biggest test yet of an idea progressives have long championed, taxing the ultra-rich on their investments rather than their paychecks. Had it passed, it would have created the nation's first wealth tax, according to the New York Times.