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California voters have decisively rejected a first-of-its-kind billionaire wealth tax, ending a costly and divisive ballot battle that drew massive spending from some of the country’s most powerful tech figures. The Associated Press confirmed Monday that Proposition 40 had failed, with the “no” side collecting enough votes to secure victory.
A Lopsided Financial Fight
The campaign against Proposition 40 vastly outspent its supporters. The “no” side raised roughly ten times more than the “yes” campaign. Google co-founder Sergey Brin contributed more than $100 million alone to a political action committee working to defeat the measure. Overall, the committee known as Building a Better California raised more than $333 million. Nearly a third of that total came from Brin.
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Brin and fellow Google co-founder Larry Page had already begun distancing themselves from California in anticipation of the possible tax. Meanwhile, Meta CEO Mark Zuckerberg said he would remain in the state for eight years and negotiated a deal with Meta to help cover any tax liability without reducing his ownership stake in the company.
What Proposition 40 Would Have Done
The measure proposed a one-time 5% tax on the net worth of Californians whose assets exceeded $1 billion. Most of the revenue would have replaced federal healthcare funding cuts. An estimated 10% would have supported education and food-assistance programs. SEIU United Healthcare Workers West, which backed the initiative, argued it was essential to offset roughly $100 billion in projected federal healthcare losses over five years.
Supporters also included Vermont Senator Bernie Sanders, who held rallies across California in the final weeks of the campaign. Progressive figures such as Massachusetts Senator Elizabeth Warren have long championed similar federal wealth tax proposals. However, Governor Gavin Newsom opposed the measure. He supports a national minimum tax on individuals worth more than $100 million, but argued a California-only wealth tax would put the state at a competitive disadvantage.
Voter Divisions and Political Fallout
Voter data from the AP Voter Poll revealed clear generational and income divides. Most Californians under 30 voted in favor of the measure. In contrast, approximately 7 in 10 voters aged 65 and older voted against it. About half of households earning under $100,000 annually supported the tax. However, closer to 6 in 10 voters earning $100,000 or more opposed it.
Some traditional Democratic allies, including Planned Parenthood and the California Medical Association, also opposed the measure. They raised concerns about how the revenue would be distributed and warned that a mass exodus of wealthy residents could seriously damage the state’s budget, which depends heavily on income taxes from its richest residents.
Robert Swonger, a politically independent auto glass technician near Sacramento, said he voted against the measure. “Obviously, I would like billionaires not to have as much money as they do,” he said. “But I don’t believe taxing them out of existence is going to work.”
Supporters of the California billionaire wealth tax have since begun running ads in New Hampshire, New Mexico and Virginia, criticizing Newsom ahead of the 2028 Democratic presidential primary.
