California billionaire tax: voters reject Proposition 40

California’s billionaire tax has failed: voters rejected Proposition 40, the referendum that would have introduced a one-time 5% levy on the fortunes of the super-rich residing in the state.¹ With 83% of the count completed, the Associated Press called the victory for the no side, at 52.8% against 47.2% for yes. The result came on a day of Democratic successes in the midterm elections, in a state considered a progressive stronghold.¹

What Proposition 40 proposed

The measure called for a one-time 5% levy on net wealth above the threshold of one billion dollars. It applied only to people who were residents of California on January 1, 2026, roughly 250 people.¹ Its backers estimated revenue of up to 100 billion dollars over five years. The state’s independent economic analysis office made more cautious estimates, which nonetheless point to tens of billions.¹ 90% of the proceeds would have gone to public healthcare and 10% to education and food assistance programs. In the proponents’ intentions, the money would have helped offset federal healthcare cuts decided by the Trump administration.¹

Rival measures and the weight of the no campaign

The ballot included two other measures backed by the side opposing the tax. Proposition 41 aimed at tighter restrictions on the use of revenue from new taxes. Proposition 42 sought to prevent the state from introducing new taxes on personal wealth and financial instruments, including shares and company stakes, and to limit retroactive taxes.¹ Proposition 42 is the only one in which the yes votes outnumbered the no votes, while 40 and 41 were rejected.¹ The resources of the two campaigns were highly disproportionate. Google co-founder Sergey Brin alone put more than 100 million dollars behind the opposing side, and former CEO Eric Schmidt another 42 million. According to an analysis by the Washington Post, reported by Open, the no side spent 250 times more on advertising than supporters of Proposition 40.¹ The ads stressed one point: the tax would push billionaires and companies to leave the state, damaging the economy and reducing tax revenue. On this, the arguments diverge. Some studies conducted in Europe, recently cited by Milena Gabanelli in the Corriere della Sera, estimate that among the wealthiest taxpayers, those who leave after a tax overhaul amount to between 0.1% and 0.5% of the total.¹

Divisions among Democrats

Outgoing governor Gavin Newsom and Xavier Becerra, who will succeed him, came out against Proposition 40. In their view, an extraordinary wealth tax would not have solved the underlying problems of public budgets.¹ This position put them at odds with a significant component of the party’s socialist wing, led by Bernie Sanders. The senator had attended a rally in Los Angeles in February to support the tax.¹

What changes

The issue remains open beyond the state: economist Gabriel Zucman has proposed a global minimum tax of 2% on billionaires, and in Italy Oxfam has relaunched a progressive wealth tax on net worth above 5.4 million euros, targeting the richest 0.1% of the population.¹

This article was written by artificial intelligence from the sources cited, without human review. Automatic newsroom by Redazia.

Sources

Footnotes

1. Tassa sui miliardari, vince Big Tech: in California non passa il referendum che ha spaccato i dem, Open, 2026-11-10 ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷ ↩⁸ ↩⁹ ↩¹⁰ ↩¹¹ ↩¹²