California voters reject 5% tax on billionaires

Overview

Updated 1 hour ago

California voters rejected Proposition 40, a one-time 5% tax on the net worth of residents worth more than $1.1 billion. The measure lost about 56% to 44% after a campaign that drew more than $330 million in opposition spending.

Supporters had projected $100 billion over five years, mostly for the state's Medicaid program. Opponents argued the tax would push billionaires out of California; at least seven had already left before Election Day.

Why it matters

The tax would have raised tens of billions for Medicaid and schools. California voters rejected it, leaving that funding gap open.

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Key Indicators

Tax rate on net worth

One-time levy proposed under Proposition 40.

$1.1B

Wealth threshold

Residents above this net worth would have owed the tax.

~200

Billionaires affected

Estimated number of Californians above the threshold.

$100B

Projected five-year revenue

Supporters' estimate, mostly for Medicaid.

55.6%

Share voting No

Projected result as of Nov. 10.

$330M

Opposition spending

Raised by opponents, according to Oxfam.

$38.9B

Estimated net loss

Stanford economists' projection from billionaire departures.

Voices

Curated perspectives — historical figures and your fellow readers.

People Involved

Gavin Newsom

Governor of California

Opposed Proposition 40; term ends in 2027

Xavier Becerra

Governor-elect of California

Opposed Proposition 40

Bernie Sanders

U.S. Senator from Vermont

Supported Proposition 40

Joshua Rauh

Stanford economist

Co-authored NBER analysis of the tax

Organizations Involved

California Legislative Analyst's Office

Nonpartisan fiscal analyst

Projected 'tens of billions' in revenue and warned of income-tax losses

The Legislature's nonpartisan budget analyst.

National Bureau of Economic Research (NBER)

Research Organization

Published working paper on the tax's revenue effects

A private nonprofit that circulates economic research.

California Teachers Association

Labor union

Opposed Proposition 40

A statewide union representing public school teachers.

Planned Parenthood

Reproductive healthcare organization

Opposed Proposition 40

A national reproductive health provider with California affiliates.

Timeline

4 events Latest: Today

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November 2026
Media projections call race for No
Today Results

Projections show No leading 55.6% to 44.4%.
Today
Stanford paper projects $38.9 billion net loss
Analysis

Economists warn departures could outweigh revenue; seven billionaires have left.
Yesterday
Early count shows measure trailing
Results

With 77% of votes counted, about 53% opposed the tax.
5 days ago
Californians vote on Proposition 40
Election

Election Day; voters decide on a one-time 5% tax on billionaires.
7 days ago

Scenarios

California's income-tax receipts hold steady

Possible Resolves by Nov 10, 2027

Discussed by: Fox Business, citing economist Wayne Winegarden

With the wealth tax off the ballot, the departures tied to it stop and revenue from high earners levels off. Winegarden argued the 'continued bleeding' should stop without the measure.

A wealth tax returns to a statewide ballot by 2028

Possible Resolves by Nov 7, 2028

Discussed by: Oxfam and supporters of Proposition 40

Supporters treat the loss as a temporary setback and organize in other states. A copycat measure qualifies for a statewide ballot before the 2028 general election.

Medi-Cal cuts follow the tax's defeat

Possible Resolves by Q2 2028

Discussed by: Supporters and the Legislative Analyst's Office

The $100 billion never arrives, and federal Medicaid cuts force California to trim coverage. The state enacts mid-year reductions.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

1982–2017

France replaces its wealth tax (2017)

France taxed large fortunes annually starting in 1982. In 2017, President Emmanuel Macron replaced the levy with a tax limited to real estate, arguing the old version discouraged investment.

Then

Wealthy households got relief on financial assets; the government said the change would draw capital.

Now

France still taxes real estate wealth, and the capital-flight argument remains central to French tax debates.

2022

Spain adds a solidarity tax on large fortunes (2022)

Spain's government introduced a temporary tax on net wealth above €3 million, layered on top of regional wealth taxes. It was meant to fund cost-of-living measures.

Then

The levy applied to a small share of taxpayers.

Now

The measure showed that national governments can override regional tax competition on wealth.