Key facts
- US media projected California voters defeated Proposition 40, a one-time 5% wealth tax on billionaires, Reuters reported.
- Supporters estimated Prop 40 would raise $100 billion, mostly for healthcare programs to offset federal funding cuts.
- Governor Gavin Newsom opposed the measure, arguing it would create an unwelcome climate for high-tech entrepreneurs.
- Google co-founder Sergey Brin and at least 11 other billionaires gave a collective $269 million to Building a Better California, per Reuters.
- That committee poured more than $300 million into campaigns opposing Prop 40, Reuters reported.
- Incoming Senate Finance Committee Chairman Ron Wyden said the panel would redouble efforts to make billionaires pay their fair share.
California voters rejected Proposition 40, a proposed one-time 5% wealth tax on billionaires, US media projected on Monday, November 9, 2026, according to Reuters. Proponents had estimated the measure would raise $100 billion in revenue, most of it earmarked for healthcare programs to offset federal funding cuts designed to pay for tax breaks enacted under President Donald Trump's "One Big Beautiful Bill."
The measure targeted stocks, bonds and business assets rather than earned income. Supporters reasoned it stood a healthy chance in a state where voter rolls favor Democrats over Republicans by a nearly two-to-one margin. California Governor Gavin Newsom, a likely candidate for the Democratic Party presidential nomination in 2028, came out against the measure, arguing it would backfire by creating an unwelcome climate for upwardly mobile high-tech entrepreneurs. His opposition and division among party leaders led initial support to wane ahead of the vote.
Opponents argued the tax would prompt the ultrawealthy to leave the state, taking their income-tax payments and job-producing enterprises with them, and discourage entrepreneurs from building startups in California. Labor unions were also divided. Billionaires contributed more than a quarter of a billion dollars to ads framing the measure as a gateway to more aggressive taxation for all Californians and as a threat to retirement accounts.
Google co-founder Sergey Brin and at least 11 other billionaires contributed a collective $269 million to a political action committee called Building a Better California, which poured more than $300 million into campaigns opposing Prop 40, Reuters reported.
The failure marks a blow to the left wing of the Democratic Party, even as Democrats won decisive majorities in both houses of Congress in a sweeping midterm election rebuke of Trump and his policies. Incoming Senate Finance Committee Chairman Ron Wyden said in a November 4 statement that the committee "will redouble its efforts to ensure billionaires pay their fair share and hold tax cheats accountable."