California voters reject billionaire wealth tax proposal

Opponents spend over $333m against Proposition 40, splitting Democrats

Voters in the state of California rejected a ballot measure that would have taxed the wealth of billionaire residents, a first in the US, according to a projection by the Decision Desk HQ (DDHQ).

About 54% of voters opposed Proposition 40 and 46% backed it, with 76% of ballots counted as of 8:51pm EST (0151GMT Saturday).

The measure would have imposed a one-time 5% tax on billionaires’ wealth, with most revenue going to state healthcare programs and the rest to food assistance and education.

The state Democratic Party, the American Federation of Labor, the Congress of Industrial Organisations and the Teamsters unions supported the measure, while California Gov. Gavin Newsom opposed it.

The term-limited governor said he supports a federal billionaire tax but criticised the plan for directing "almost all of the revenue" to healthcare.

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"There is nothing for housing, nothing for childcare, nothing for public safety workers who must answer 911 calls, and nothing for our public universities that have powered California’s economy for a decade," he wrote in a Substack post in June.

Billionaires, including many Silicon Valley executives, gave more than $333 million to the nonprofit Building a Better California to oppose the measure.

The state’s Legislative Analyst’s Office estimated a tax on about 200 billionaires would have raised tens of billions of dollars.