California rejects billionaire tax

California voters have rejected a proposal to introduce the first wealth tax of its kind in the US, targeting billionaires’ fortunes, according to Decision Desk HQ projections released on Monday.

The measure, known as Proposition 40, proposed a one-time tax of 5% on most assets held by California residents with a net worth exceeding $1 billion. At least 90% of the proceeds would have gone toward state-funded healthcare programs, including expanded Medi-Cal coverage for low-income residents, people with disabilities, and the elderly.

The measure was proposed by the SEIU United Healthcare Workers West union, which hoped to raise around $100 billion over five years to offset cuts in federal funding for healthcare programs. Union President Dave Regan said the group will put the tax back on the ballot in 2028 if the Californian authorities fail to find another way to make up for the finance shortfall.

The proposition was put to a statewide vote on November 3, alongside federal and local elections. According to Decision Desk HQ, nearly 53% of voters opposed the measure, with 84% of ballots counted.

Opponents of the tax reportedly raised roughly ten times more money for their campaign than its supporters. Google co-founder Sergey Brin is said to have donated more than $100 million to a political action committee working to defeat the measure.

In October, those seeking to defeat the proposal launched an extensive television advertising campaign, while supporters, constrained by limited funding, relied primarily on social media and influencers, the New York Times reported earlier this week. The proposal was also opposed by teachers’ and firefighters’ unions, as well as the California chapter of Planned Parenthood.

According to a UC Berkeley-POLITICO poll, critics feared that the one-time levy could eventually become a recurring measure. They also warned that wealthy residents might leave California for states with more favorable tax policies, eroding the state’s tax base.

At least six billionaires announced plans to leave California before January 1, 2026, Fortune reported in March. Larry Page and Peter Thiel moved to Florida, Sergey Brin and Don Hankey to Nevada, Steven Spielberg to New York, and Travis Kalanick to Texas. At a 5% rate, the tax on their combined wealth could reportedly have amounted to around $27 billion.