California Voters Reject the Billionaire Tax After a $378 Million Campaign Against It

California voters have rejected Proposition 40, the first-in-the-nation ballot measure that would have imposed a one-time 5 per cent tax on the wealth of the state's billionaires, the Associated Press called the race on Monday, nearly a week after polling day on 3 November. With about 83 per cent of the expected vote counted, the measure was failing by 52.8 per cent to 47.2 per cent — 5,909,778 votes against and 5,288,379 in favour, a margin of roughly 621,000. The result is not final until the Secretary of State certifies it on 11 December, but the margin is far too large to be overturned by the remaining count.

The measure would have applied to Californians whose net worth exceeded $1 billion and who were residents of the state on 1 January 2026, with the tax measured on their wealth at the end of the year. About 200 people would have been affected. Its backers, led by the healthcare workers' union SEIU-United Healthcare Workers West, estimated it could raise about $100 billion over five years, with the money directed to healthcare, K-12 education, Medi-Cal and CalFresh. Supporters included the California Democratic Party, the Democratic Socialists of America, Senator Bernie Sanders and Representative Ro Khanna, who framed the tax as a way to make the state's richest residents pay for public services after years of budget strain.

The campaign against it became one of the most expensive ballot fights in California history. Opponents spent $378.4 million, led by $102 million from Google co-founder Sergey Brin, against just $33.5 million raised by the Yes campaign — a gap of more than ten to one. The opposition argued the tax would drive billionaires out of the state, pointing to the permanent loss of income-tax revenue from departing residents, which they said could outweigh the one-time windfall and leave California a net $38.9 billion worse off. The threat was not abstract: reports in October said Meta chief executive Mark Zuckerberg had threatened to leave California over the measure, a story that itself became a rallying point for both sides.

The polls had been moving against the measure for weeks. An October survey by UC Berkeley's Institute of Governmental Studies found 50 per cent of likely voters opposed it and 42 per cent in favour, up from 48 per cent opposed in August, while a separate October poll by the Public Policy Institute of California put opposition at 52 per cent and support at 46 per cent. Even in San Francisco, one of the most progressive cities in the country, the measure passed only narrowly, by roughly 56 per cent to 44 per cent. The defeat came in an election in which Democrats otherwise performed strongly, a fact opponents seized on as evidence that even a Democratic-leaning electorate would not back a wealth tax.

Voters may also have closed the door on future attempts. Proposition 42, a rival measure backed by Governor Gavin Newsom that bars new state taxes on personal property and retroactive taxes, was leading by 51.6 per cent to 48.3 per cent at a similar point in the count, though it had not yet been called. If it passes with more votes than Proposition 40, it would in any case have nullified the billionaire tax; as it stands, it would prohibit similar taxes in future. A third measure in the set, Proposition 41, was rejected.

Online, the result drew anger from supporters who blamed the spending gap. In a widely shared Reddit thread on r/California about the outcome, one highly upvoted comment argued that early polls had shown 55 per cent support "then billionaires spent more than $300 million dollars on propaganda to get people to vote no" (r/California), while another thread about Mr Zuckerberg's reported threat to leave drew more than 13,000 upvotes, with the top comment simply replying "bye bitch" (r/California). The result is likely to echo well beyond California: wealth-tax proposals have been debated in several other states and in Congress, and the defeat of the most ambitious version yet — in the country's most Democratic large state, and after a campaign its opponents outspent ten to one — will be read as a verdict on the idea itself, at least for now.