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California's voters have said no to taxing their billionaires. The Associated Press called the result on Monday, November 9: Proposition 40, a first-in-the-nation ballot measure that would have imposed a one-time 5% tax on the wealth of the state's richest residents, was rejected by 52.8% of voters to 47.2%. The defeat ends one of the most expensive ballot fights in American history — and it was decided by money as much as by votes.
What Prop 40 would have done
According to reports from Reason and NationWire, citing the Associated Press, the measure would have applied to Californians whose net worth exceeded $1 billion and who were residents of the state on January 1, 2026. About 200 billionaires would have paid. Supporters, led by the healthcare workers' union SEIU-United Healthcare Workers West, estimated it could raise about $100 billion over five years, with 90% of the revenue reserved for healthcare and the rest for education, food assistance and administration. Real estate and some pension and retirement assets would have been excluded, and the tax would have been due in 2027 with an option to spread payments over five years. With about 83% of the expected vote counted, the measure trailed by about 621,000 votes — 5,909,778 against and 5,288,379 in favour. The result is not final until the California Secretary of State certifies it on December 11.
How $378 million beat the tax
The campaign against Prop 40 was one of the most expensive in the state's history. Opponents spent $378.4 million, according to a CalMatters tally, against $33.5 million raised by supporters — more than ten to one. Google co-founder Sergey Brin alone contributed $102 million to defeat a tax that could have cost some of the state's richest residents billions of dollars each. Technology founders, venture capitalists and senior executives joined forces against it, arguing that the tax would drive billionaires — and their income-tax payments — out of California, with one estimate warning of a net loss of $38.9 billion once departing taxpayers were counted. Supporters included Senator Bernie Sanders, California Representative Ro Khanna and the California Democratic Party. Democratic Governor Gavin Newsom opposed it. Polling had pointed this way for weeks: an October survey by UC Berkeley's Institute of Governmental Studies found 50% of likely voters opposed and 42% in favour, and a Public Policy Institute of California poll put opposition at 52% and support at 46%.
What the result does — and does not — settle
The defeat may not be the billionaires' only victory. A companion measure, Proposition 42, which would prohibit new taxes based simply on ownership of financial assets and personal property and block retroactive taxation in most cases, was leading with about 51.6% support and had not yet been called. If it passes, it would make a future wealth tax much harder to enact. But the result is not a sweeping rejection of taxing the wealthy. In the same election, about 60% of California voters approved a measure making existing higher income tax rates permanent for high earners, including individuals making more than roughly $371,000 a year. The map was split too: San Francisco backed Prop 40 by roughly 56% to 44%, and Los Angeles County voted for it 53% to 47%, while Santa Clara County, in the heart of Silicon Valley, voted it down. The lesson of Prop 40 is narrower and sharper than either side will admit: Californians will vote for higher taxes on high earners, but a one-time levy aimed at 200 named billionaires — fought with $378 million — was a step they would not take. For the wider American economy and politics, see our reports on the October jobs report and the Democrats' midterm sweep.