California voters have said no to the billionaire tax. Nearly a week after the November 3 midterm elections, the Associated Press determined on Monday, November 9, that Proposition 40 — a first-in-the-nation proposal for a one-time 5 percent tax on the net worth of California billionaires — had been defeated. The final margin was about 52.9 percent against to 47.1 percent in favor, with roughly 5.79 million votes against and 5.16 million for, according to the California Secretary of State’s tally.
The result ends one of the most expensive and closely watched ballot campaigns in American history, and it arrives with a twist: the same voters who rejected the tax also appear to have backed a rival measure, Proposition 42, that would write a ban on new wealth taxes into the California Constitution. The outcome is a defeat not just for the tax itself, but for the idea of taxing billionaire wealth at the state level — at least for now.
Here is what Proposition 40 would have done, how the campaign became a record-breaking spending war, who won and who lost, and what happens next.
What Proposition 40 Proposed
Proposition 40 would have imposed a one-time tax of 5 percent on the net worth of Californians worth more than $1 billion, measured as of December 31, 2026, with payment due in 2027. Real estate, pensions, and retirement accounts were generally excluded from the calculation. The measure was placed on the ballot by the health care workers’ union SEIU-UHW, and its backers said it would have raised roughly $100 billion, with most of the money directed to health care.
About 200 billionaires live in California, more than in any other state, which is why the measure drew national attention. It would have been the first time any American state taxed billionaire wealth directly, and supporters framed it as a test of whether the richest state in the country could ask its richest residents to help fund public health care after federal budget cuts.
The measure’s opponents included some of the most prominent Democrats in the country. Governor Gavin Newsom opposed it, arguing that billionaires would simply move away or find ways around the tax. Senator Bernie Sanders, by contrast, campaigned in support of it, making the measure a rare public split inside the Democratic Party.
A Record-Breaking Spending War
The campaign over Proposition 40 became the most expensive ballot fight in California history, and the spending was lopsided. The opposition committee, Building a Better California, raised more than $333 million, nearly a third of it from Google co-founder Sergey Brin alone, who contributed more than $100 million. Supporters raised about $32 million. In other words, the no side outspent the yes side by roughly ten to one.
That money bought a flood of advertising, including spots warning that the tax would drive jobs and investment out of the state. Supporters countered with ads about underfunded hospitals and the scale of billionaire wealth, but they were outgunned on the airwaves from the start.
The spending gap helps explain the result, but it is not the whole story. The measure also faced a structural problem: it was one of three related measures on the same ballot. Proposition 41 and Proposition 42, backed by the tax’s opponents, were designed to undercut it. Proposition 42 would bar new state taxes on the ownership of personal property and savings, and any new retroactive taxes, from January 1, 2026 onward. Under California’s rules, if both measures had passed, Proposition 40 would have needed more yes votes than Proposition 42 to survive. As it turned out, that rule was not needed: Proposition 40 lost outright, while Proposition 42 led with about 53.4 percent of the vote.
Who Voted Which Way
The vote split along lines that will be studied for years. San Francisco, the city with the highest concentration of billionaires in the state, actually backed the measure, voting roughly 56 percent to 44 percent in favor. Statewide, though, the no side won comfortably.
Age was the sharpest dividing line. An Associated Press voter poll found that most voters under 30 supported Proposition 40, while roughly seven in ten voters aged 65 and older voted against it. The generational gap reflects a broader divide in American politics: younger voters, who came of age amid rising housing costs and stagnant wages, were far more willing to tax extreme wealth than older voters who have spent decades accumulating it.
Geography mattered too. The measure performed best in the Bay Area and in parts of Los Angeles, and worst in the Central Valley and in inland counties. But even in its strongest regions, support was not enough to overcome the statewide deficit.
Why It Failed
There are several explanations for the defeat, and they are not mutually exclusive. The first is the money. A ten-to-one spending disadvantage is hard to overcome in any campaign, and the opposition’s advertising was relentless in the final weeks.
The second is the messenger problem. The measure’s most prominent opponent was a Democratic governor, and its most prominent supporter was a senator from Vermont. For many California voters, the sight of their own governor arguing against a tax on billionaires carried weight, even if they were sympathetic to the idea in principle.
The third is the design of the measure itself. A one-time tax on net worth is an unusual instrument, and voters were asked to approve something no American state had ever tried. The measure’s critics argued, credibly to many voters, that the wealthiest residents could restructure their holdings, change their residency, or challenge the tax in court for years. The promise of $100 billion for health care depended on all of that going right.
Finally, there is the context of the election itself. The November 3 midterms delivered sweeping victories for Democrats across the country, but Proposition 40 was not a partisan question. It cut across party lines in ways that made it hard for either side to claim a clean mandate.
What Happens Next
The defeat does not end the debate. Supporters of the tax have already said they will put the measure back on the ballot in 2028 if patients are not protected, and the campaign’s organizers framed the loss as a first round rather than a final verdict. California has now voted three times this decade on a wealth tax, rejecting it every time — but the margin has narrowed, and the coalition behind the idea is not going away.
Proposition 42, meanwhile, is likely to become law, which would make future wealth taxes even harder to enact. If the current count holds, California will have added a constitutional provision barring new taxes on personal property and savings, a constraint that will shape the state’s fiscal debates for years.
The broader lesson may be about the limits of ballot-box redistribution. A tax on billionaires polls well in the abstract, but when voters are asked to approve a specific mechanism, with a specific price tag and specific opponents, the politics get harder. California just proved that the distance between supporting the idea of taxing billionaires and voting for an actual billionaire tax is real — and, for now, decisive.
Frequently Asked Questions
What was California Proposition 40?
Proposition 40 was a ballot measure that would have imposed a one-time 5 percent tax on the net worth of Californians worth more than $1 billion, with the money largely directed to health care. It was defeated on November 3, 2026, with about 52.9 percent voting no.
How much would Proposition 40 have raised?
Supporters estimated the tax would have raised roughly $100 billion from about 200 California billionaires. Opponents disputed that figure, arguing that many billionaires would move or restructure their wealth to avoid it.
How much was spent on the Proposition 40 campaign?
The opposition raised more than $333 million, including over $100 million from Google co-founder Sergey Brin, while supporters raised about $32 million — a roughly ten-to-one spending gap.
What is Proposition 42?
Proposition 42, backed by opponents of the billionaire tax, would write a ban on new state taxes on personal property and savings into the California Constitution. It led with about 53.4 percent of the vote.
Will the billionaire tax come back?
Supporters have said they will put the measure back on the ballot in 2028 if health care funding is not protected. California has voted on a wealth tax three times this decade and rejected it each time.
Sources
- Malay Mail / AFP — California rejects 5% billionaire tax that would have raised US$100b, US media projects
- Times Now — California Says No To Billionaire Tax: Google Co-Founder Leads $333 Million Opposition
- California Today — California voters are rejecting the billionaire tax and backing Prop 42
- The San Francisco Focal — California Voters Reject Landmark 5% Billionaire Tax as Prop. 40 Fails