California voters fail to pass proposed one-time tax on billionaires’ wealth

California billionaires won a contentious ballot measure campaign, defeating a proposed one-time tax on their wealth.

The bruising campaign over Proposition 40 was the most expensive in state history and witness to back-and-forth dealing from tech billionaires and democratic leaders, including Gavin Newsom, the governor, who steadfastly opposed the measure.

While supporters of Prop 40 cast it as a solution to drastic healthcare cuts from Donald Trump’s One Big Beautiful Bill Act, opponents led by prosperous billionaires mounted an influential campaign saying the billionaire tax was instead “an everyone tax”.

The Associated Press called the race late Monday night with 83% of the votes in. Of that count, 52.8% of people voted no and 47.2% voted yes.

“Proposition 40 was a reckless experiment conducted on our state’s economy with little regard for the harms it would cause,” the no on Prop 40 campaign said in a statement. “It was built on false assumptions and promises, flawed in its design and execution, and reliant on economic theories rejected many times over.”

This result could hamper nationwide momentum on demands that billionaires pay their fair share and states enacting new laws to tax the ultra-wealthy, but supporters say the fact that a proposed billionaire tax even made the ballot is a win.

“While we hoped for Prop 40’s passage, this moment still marks progress toward a new era of bold taxation, and the billionaires know it,” said Nabil Ahmed, Oxfam America’s senior director of economic justice. “Over the course of the past few weeks and months we have seen popularity for taxing wealth grow, along with ever-strengthened support for its economic credibility.”

Prop 40 proposed a one-time 5% tax on all individuals in California with a net worth of more than $1bn as of 1 January 2026. It was sponsored by the healthcare union SEIU-United Healthcare Workers West (SEIU-UHW), and dictated that the proceeds from the tax would fund healthcare programs, along with some education and food assistance.

The state’s leading unions, and progressive politicians such as Bernie Sanders, the Vermont senator, and Ro Khanna, a California congressman, backed Prop 40. But the Democratic and Republican candidates for governor, as well as organizations such as Planned Parenthood Affiliates of California, a lobbying branch of the healthcare group, opposed it – pointing to its structure as a one-off tax that would only fund certain healthcare programs. Prop 40’s most vocal critics, however, were the state’s billionaires.

Donors to the opposition campaign were a who’s who of Silicon Valley, including executives from Google, Palantir, DoorDash, Stripe and Reddit, along with several prominent venture capitalists. The biggest donor, by far, was Sergey Brin, a Google co-founder, who contributed at least $132m to fight the tax, according to campaign finance filings.

All told, the billionaires mounted a nearly $425m battle against Prop 40, making it the most expensive opposition campaign in state history. In the first two weeks of October, spending surpassed $2.5m a day, according to the most recent campaign finance filings.

“A tiny group of the most controversial and wealthiest billionaires on the planet poured nearly five hundred million dollars into a deeply misleading and corrupt campaign to defeat a proposal that would have protected lifesaving healthcare for children, families, veterans and seniors,” Suzanne Jimenez, chief of staff for the SEIU-UHW, said in a statement. “Buying an election is not the same as winning the debate.”

Part of the opposition campaign’s strategy was mounting two separate countermeasures on the ballot, Proposition 41 and 42. Prop 41 directly targeted the billionaire tax, while Prop 42 was a general proposal on limiting certain new taxes and would ban any taxation on billionaire wealth. If either measure received more yes votes than Prop 40, they would stop the billionaire tax from taking effect – even if it passed.

Supporters of the billionaire tax called Props 41 and 42 “poison pills”.

Californians voted against Prop 41, with 54.9% voting no and 45.1% voting yes. While the Prop 42 race is yet to be called, it’s poised to pass with yes votes currently leading by three points.