SACRAMENTO, CALIFORNIA — California voters have rejected Proposition 40, the closely watched measure that would have imposed a one-time 5% tax on residents worth more than $1 billion, according to a projection from Decision Desk HQ.
With roughly three-quarters of ballots counted, about 54% opposed the measure and 46% supported it. The Associated Press had not yet called the race Friday, but Proposition 40 had consistently trailed by a substantial margin.
The proposal would have applied to roughly 250 California billionaires and generated tens of billions of dollars, according to state estimates. Ninety percent of the revenue would have gone toward healthcare, with the remainder funding food assistance and education programs.
Opponents dramatically outspent supporters. Billionaires and business groups poured more than $300 million into efforts opposing Proposition 40 and promoting competing measures that could have blocked it. Google co-founder Sergey Brin alone contributed more than $100 million.
Gov. Gavin Newsom also opposed the measure, arguing it could encourage wealthy residents to leave California and destabilize state revenues. Supporters, including Sen. Bernie Sanders and the California Democratic Party, argued billionaires should contribute more toward healthcare and social programs.
The defeat does not necessarily end the wealth-tax debate. Democratic leaders nationally have already indicated that taxing extremely wealthy Americans will remain part of their agenda.
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