California voters reject billionaire tax in Prop 40

California voters rejected Prop 40, a proposal to impose a one-time 5% tax on the wealth of billionaires. The Associated Press called the race, confirming that the measure to raise funds for healthcare did not pass. The state is home to more than 200 billionaires, a number some estimates place at a few hundred.

Supporters, led by the SEIU-UHW union, argued that the tax would generate $100 billion for healthcare. They claimed that Republican-controlled Congress had cut healthcare programs to provide tax breaks to the wealthy, leaving California’s rich to fill the gap. However, the proposal split the state’s Democratic Party, which heavily outnumbers Republicans.

Gov. Gavin Newsom opposed the tax, stating he preferred a national wealth tax. Rep. Ro Khanna and Sen. Bernie Sanders campaigned for the measure, and the state Democratic Party favored it. In contrast, Democratic gubernatorial candidate Xavier Becerra also opposed the proposal. A leading teachers union backed the opposition because the plan allocated only a small portion of the revenue to schools.

Opponents argued that the tax would drive wealthy residents out of California, reducing state revenue and harming the economy. Google co-founder Sergey Brin led a surge of campaign spending against the measure. At least five times as much money was spent opposing Prop 40 as supporting it. Brin also drove a campaign that placed two other proposals on the ballot to block the tax from taking effect if it had passed.

The result reflects a deep division among Democrats in a key state. While national figures like Sanders pushed for the tax, local leadership and major unions leaned against it. The defeated proposal would have targeted the vast majority of billionaire wealth in the state. The final tally confirms that California voters chose to keep the current tax structure in place for this cycle.