California voters reject Proposition 40, the one-time 5% tax on billionaires

The essentials: California voters have rejected Proposition 40, a one-time 5% tax on the net worth of the state’s billionaires, the Associated Press projected on the evening of Monday 9 November 2026, six days after Election Day. The measure, backed by a health care workers’ union, aimed to make up for cuts in federal health funding. It was opposed by Governor Gavin Newsom and by tech billionaires who spent more than $300 million against it.

What did Proposition 40 propose?

The initiative would have imposed a one-time tax of 5% on the wealth of California residents and trusts with assets above $1 billion, ABC News reports. It applied to billionaires living in the state on 1 January 2026, and the tax would have been due in 2027, according to Newsweek. About 200 people would have been affected.

Ninety percent of the money was earmarked for health care, with the rest going to education, food assistance and the cost of collecting the tax. The sponsor, the union SEIU-United Healthcare Workers West, estimated the revenue at about $100 billion over five years. The state’s nonpartisan Legislative Analyst’s Office was more cautious, speaking of “tens of billions of dollars spread over several years,” as quoted by Newsweek.

According to the AP story published by Univision, California would have been the first state to levy such a tax. Supporters argued it was needed to replace roughly $100 billion in federal health care funding the state is due to lose.

What were the results?

The AP call came after almost a week of counting. The figures below are the unofficial count from the California Secretary of State at 5:14 p.m. on Monday 9 November, as reported by Newsweek and Patch. Results will only be certified later.

Proposition 40	Votes	Share
No	5,789,026	52.9%
Yes	5,159,356	47.1%

Opponents also put two rival measures on the ballot. Proposition 42 would ban new state taxes on personal property, including financial assets, and Proposition 41 would tighten the rules on new taxes kept outside the state’s spending limit, Patch explains. Both contained clauses that would have cancelled Prop 40 if they received more votes. Proposition 42 was leading with 51.7% at the same time, Newsweek reported, but the AP had not yet called it.

Who was for and against it?

The opposition campaign, Building a Better California, raised $333.1 million this year, most of it from billionaires, ABC News reports. Google co-founder Sergey Brin alone gave $102 million. Newsweek says opponents raised about ten times as much as supporters.

Governor Newsom, who is considering a run for president in 2028, was the most prominent opponent. He argued the tax would push wealthy residents and businesses out of California, and has said he prefers a federal minimum tax on large fortunes. Xavier Becerra, elected governor on 3 November, and nine Democratic state lawmakers also opposed it; the lawmakers warned in an open letter that it “will blow a massive hole in our state budget,” Patch reports.

On the other side, Senator Bernie Sanders and Representative Ro Khanna campaigned for the measure, and the California Democratic Party endorsed it. Khanna told ABC News that he and Newsom were “polar opposites” on the issue.

Why does the result matter beyond California?

The vote was watched as a test for wealth taxes in other states, at a time when the midterm elections handed Democrats control of Congress (see our results article). Even before the vote, some billionaires had left the state ahead of the 1 January 2026 cut-off date: Newsweek reports that Brin and Larry Page started moving away, while Mark Zuckerberg committed to stay.

Supporters say they are not giving up. Union leader Lorena Gonzalez said the campaign was “showing other states that you can look them in the eye,” and labour leaders presented the campaign as a first step, according to Newsweek.