California Voters Reject Proposition 40 Billionaire Tax

California voters rejected Proposition 40 on Monday, effectively defeating a proposed 5% tax on the assets of the state’s ultra-wealthy.

The Associated Press reported that the measure failed with approximately 53% of voters opposing the tax, while 47% supported it, ending a high-stakes campaign that was among the most expensive in California history.

Brin’s Contributions Fuel Opposition Spending

The campaign surrounding the billionaire tax became one of the most expensive in California history, with total spending exceeding $400 million across three related ballot measures.

According to fundraising disclosures filed with the secretary of state’s office, more than 90% of that total was directed toward opposing the tax. The funding surge for the “no” campaign included massive contributions from Google co-founder Sergey Brin, who helped finance advertising efforts to kill the proposal.

The defeat followed a consistent trend, as the tax trailed in vote counts from the first day of counting. While some areas in San Francisco and Los Angeles—home to many of California’s 200 billionaires—backed the measure, Orange County voters overwhelmingly rejected it.

Groups Warn Tax Harms Middle-Class Services

Opponents of the measure, including the California Medical Association, the California Primary Care Association, and the California School Boards Association, characterized the proposal as a reckless experiment. They argued that the tax threatened California’s economic competitiveness and fiscal stability. These groups claimed the tax would jeopardize the state’s ability to fund essential services, including public safety, infrastructure, and healthcare.

The campaign against the tax successfully shifted the narrative by highlighting potential impacts on middle-class Californians. Teachers and firefighters appeared in advertisements as the face of the opposition, arguing that the tax could have broader economic consequences beyond the ultra-wealthy. This messaging gained traction as some high-profile billionaires, including Google co-founders Sergey Brin and Larry Page, reportedly moved out of California during the debate over the proposal.

SEIU Warns Healthcare Funding Instability Looms

Proposition 40 was designed to generate revenue to offset an estimated $100 billion in federal healthcare funding cuts. Under the proposal, 90% of the funds raised would have been dedicated to healthcare, with the remainder allocated to schools and food assistance. The Service Employees International Union-United Healthcare Workers West, which backed the measure, warned that California’s budget is unstable and likely to face heavy strain next year.

Suzanne Jimenez, chief of staff for the SEIU-UHW, expressed disappointment in the outcome. “Billionaire-funded propaganda may have influenced the outcome of this election, but as hospitals reduce services, emergency rooms close and families lose access to care, the truth will become increasingly difficult to hide,” Jimenez stated.

The union has vowed to return to the ballot in 2028 if state lawmakers in Sacramento fail to secure alternative funding for the public health sector.

Sanders and Khanna Push Federal Billionaire Tax

The failure of Proposition 40 does not signify the end of the broader political discussion regarding wealth taxation. U.S. Senator Bernie Sanders and Representative Ro Khanna, both of whom supported the California measure, continue to advocate for a federal 5% tax on American billionaires. The pair introduced the “Make Billionaires Pay Their Fair Share Act” earlier this year.

Despite the Democratic party gaining control of both the House and Senate, any federal attempt to implement such a tax faces potential constitutional challenges.

The defeat of Proposition 40 leaves California’s financial roadmap unclear as the state confronts major healthcare funding shortfalls. With no immediate solution for the estimated $100 billion in federal healthcare funding cuts, the debate over how to balance public funding against the state’s economic climate is expected to persist.

Earlier coverage: California Voters Reject Prop 40 Billionaire Tax Amid Democratic Divide