California voters reject first-of-its-kind billionaire wealth tax

California voters have decisively rejected Proposition 40, a proposed one-time 5% tax on the net worth of the state’s approximately 200 billionaires, San Jose Inside reported. With about half the votes counted, 56.4% opposed the measure, amounting to a nearly 800,000 vote margin against it.

The tax would have targeted billionaires’ stocks, bonds, business holdings, and other valuable personal property. Supporters, including the Service Employees International Union-United Healthcare Workers West, said the tax would generate an estimated $100 billion over five years to fund healthcare and education programs.

The nonpartisan Legislative Analyst’s Office projected that the tax would raise tens of billions of dollars over several years, less than supporters’ estimates, and noted that billionaires leaving the state could reduce income tax revenue by less than $1 billion annually.

The vote was complicated by competing ballot measures, Propositions 41 and 42, which were designed to conflict with Proposition 40. If either countermeasure received more votes, it would nullify the billionaire tax. Governor Gavin Newsom and San Jose Mayor Matt Mahan opposed the tax, with Newsom endorsing Proposition 42, which would ban all wealth taxes in California.

The debate over Proposition 40 highlighted divisions within the Democratic Party and mobilized some of Silicon Valley’s wealthiest executives to spend hundreds of millions of dollars to defeat the measure.