Tech billionaires prevail as California rejects landmark wealth tax measure

What Proposition 40 proposed

Proposition 40 would have imposed a one-time 5% charge on the net worth of Californians whose wealth exceeded $1 billion. Most of the money was designated to replace federal healthcare funding cuts, while 10% would have gone to education and food-assistance programs.

SEIU United Healthcare Workers West supported the measure, citing an estimated $100 billion in federal healthcare funding California is expected to lose over five years. Supporters presented the proposal as a test of taxing investments, rather than wages, as a source of billionaire wealth.

A costly campaign fight

Billionaires contributed millions to the opposition. Larry Page, Brin’s fellow Google co-founder, and other wealthy residents began cutting ties with California ahead of the vote, amid concerns about the tax and the state’s finances.

Arguments over state finances

Opponents warned that wealthy taxpayers might leave and questioned how tax revenue would be divided. California relies heavily on income taxes paid by its richest residents. The coalition opposing Proposition 40 called it a reckless economic experiment and said it could cause harm.

Gov. Gavin Newsom argued a state-level wealth tax would leave California at a disadvantage, although he supports a national minimum tax for people worth more than $100 million. He praised Sen. Bernie Sanders’s focus on wealth inequality but said he disagreed with him on this proposal.

Supporters look beyond California

Sanders backed the measure and toured California cities during the campaign’s final weeks, urging voters to approve it. Sen. Elizabeth Warren and other progressive politicians have also supported a federal wealth tax.

Supporters have recently run ads in New Hampshire, New Mexico and Virginia criticizing Newsom’s opposition. Those states vote early in the 2028 Democratic presidential primary.