California voters reject a billionaire tax

California voters have rejected the first statewide billionaire wealth tax in the US. With most of the expected vote counted, Proposition 40 was losing by roughly 56 per cent to 44 per cent, according to NBC News projections reported by La Voce di New York. The result is not yet certified.

What it would have done

The measure would have charged residents worth more than $1bn a one-time tax of 5 per cent of their net worth, payable over several years. It would have covered stocks, bonds and business stakes, while generally exempting real estate and pensions. The state's nonpartisan Legislative Analyst's Office said most of the money would go to healthcare, with smaller amounts for education and food assistance. Supporters estimated it would raise about $100bn.

Voters also faced a backstop. Proposition 42, a constitutional amendment banning new taxes on personal property, financial assets and retirement accounts and barring retroactive taxes, was passing with about 55 per cent. Under California law, when conflicting measures both pass, the one with more yes votes wins.

Who opposed it

The campaign was one of the most expensive of the cycle, with opponents reportedly spending about $316mn. Governor Gavin Newsom and the California Teachers Association were among those who opposed it, arguing that wealthy taxpayers would leave and future revenue would fall. Several billionaires had already moved out of the state before the vote.

Washington went the other way

Further north, Washington state voters kept their new tax on high earners. An initiative to repeal the 9.9 per cent levy on income above $1mn a year, approved in 2025, was failing by about 58 per cent to 42 per cent.

*Image: The California State Capitol in Sacramento. Photo: Frank Schulenburg / Wikimedia Commons, CC BY-SA 4.0*