California voters have rejected Proposition 40, a proposed one-time 5% tax on the net worth of the state's billionaires. The measure, which targeted total wealth including company shares and income, was intended to raise funding for healthcare and address cuts resulting from Trump’s One Big Beautiful Bill Act.
The campaign over the measure was the most expensive in state history, characterized by record-breaking spending for a tax-related measure in California. Tech leaders and the wealthy elite poured hundreds of millions of dollars into the effort, outspending backers roughly 10 to 1. The fight saw back-and-forth dealing between tech billionaires and Democratic leaders, including Governor Gavin Newsom, who steadfastly opposed the tax.
Supporters, including U.S. Senator Bernie Sanders and other progressives, championed the tax as a tool to combat economic inequality. However, opponents successfully framed the measure as an everyone tax, warning that the wealth tax would drive the super-rich out of the state.
While the defeat marks a setback for progressives seeking to tax the ultra-rich, the debate over taxing big fortunes is expected to return to the forefront following the Democratic victory in the midterm elections.