CBS projects California voters reject Prop 40 billionaire wealth tax after $250 million opposition campaign

A tax debate with wider stakes

Supporters said the measure could help address federal healthcare cuts made in 2025 under H.R. 1, also called the “One Big Beautiful Bill Act.” They argued that additional funds could help hospitals, emergency rooms, clinics and Medi-Cal services.

Opponents warn of consequences

Gov. Gavin Newsom and Porter, both supporters of higher taxes on corporations and wealthy individuals, agreed with opponents that a California-only wealth tax could prompt wealthy residents to leave and weaken the state’s long-term finances by reducing tax revenue.

Newsom has favored taxing billionaires at the federal level. He has also argued that the California measure would fund healthcare alone, while opponents said it did not guarantee how money would be divided among providers and services.

Campaign funding and alternatives

Wealthy opponents gave tens of millions of dollars to efforts to defeat Proposition 40. Most of that funding went to Building a Better California, which had raised more than $250 million in opposition as of Oct. 28.

The funding also supported Propositions 41 and 42. Those measures would limit special taxes and could block the billionaire tax from taking effect if either won more votes than Proposition 40.