California voters turn down billionaire tax in setback for progressives
The projected defeat of Proposition 40 follows a costly opposition campaign and divisions among Democrats over taxing the state's wealthiest residents.
By Larissa Bell ·
California voters have rejected a proposal to tax billionaires, according to projections from the Associated Press news agency, dealing a setback to progressive politicians who had promoted the measure as a way to address economic inequality. With roughly 60 percent of ballots counted on Tuesday, November 10, opposition stood at 55.6 percent, while support was at 44.4 percent.
Proposition 40 would have levied a single 5 percent tax on California residents with net worth above $1bn. The measure would have generated $100bn, with the largest share directed towards healthcare programmes. Education and food assistance were also designated to receive part of the proceeds.
US Senator Bernie Sanders and other progressive politicians backed the proposal, presenting it as an approach that could be adopted elsewhere in the country. Democrats supporting the tax argued that California needed the revenue to compensate for federal funding reductions under President Donald Trump's One Big Beautiful Bill.
But the proposal faced opposition within the Democratic Party, including from outgoing California Governor Gavin Newsom, a likely contender for the party's 2028 presidential nomination. Newsom and other critics said the levy could drive ultrawealthy residents and technology entrepreneurs out of California, costing the state their income-tax revenue and businesses that create jobs.
Support for the measure weakened before the midterm election vote as Newsom opposed it and divisions emerged among party leaders and labour unions. California billionaires, among them Google cofounder Sergey Brin, poured more than a quarter of a billion dollars into the campaign to defeat Proposition 40.
Those campaigning against the proposal argued that its consequences could extend beyond billionaires. They portrayed it as an opening for more aggressive taxation affecting all Californians and warned that retirement accounts could become targets.
The result is a disappointment for the Democratic Party's left wing at a time of broader electoral gains for Democrats. The party secured majorities in both houses of the US Congress during a midterm election surge described as a “blue tsunami”, giving its progressive wing fresh momentum.
Nevertheless, incoming US Senate Finance Committee Chairman Ron Wyden has indicated that taxing the ultrawealthy remains a priority for the wider party. In a November 4 statement setting out the committee's agenda, he said: “The committee will redouble its efforts to ensure billionaires pay their fair share and hold tax cheats accountable.”
