California Voters Expected to Reject Billionaires Tax After Expensive Fight

What Prop 40 Tried to Do

Proposition 40 proposed a one time 5% levy on the wealth of anyone who qualified as a billionaire and was a California resident at the start of 2026. Most of the revenue was slated to support healthcare.

A healthcare workers union first floated the plan more than a year ago to counter billions in federal cuts they said could shutter hospitals and leave millions of Californians uninsured. Progressive allies lined up, including Senator Bernie Sanders and Representative Ro Khanna, whose constituency covers Silicon Valley. As polls were closing, Khanna said, "There has to be a tax on billionaires," and added, "We will see this happen, we will succeed, and we will outrun the money."

How the Opposition Mobilized

Opponents ranged from Silicon Valley magnates to Democratic Governor Gavin Newsom, along with the Planned Parenthood Affiliates of California and other organizations. The no campaign surpassed $300 million, centered on Building a Better California, a political operation bankrolled by Sergey Brin and other ultrawealthy residents.

Brin, ranked the world's fourth richest person by the Bloomberg Billionaires Index, cast his opposition in personal terms, citing his family's 1979 flight from the Soviet Union. He moved to Nevada, put more than $100 million into a group largely focused on defeating the tax and helped rally fellow billionaires. Venture capitalists Peter Thiel and David Sacks, along with Brin's Google cofounder Larry Page, began making moves to depart the state. Mark Zuckerberg considered relocating and was preparing to list his Palo Alto home, but after Meta reached a deal that expanded his ability to sell shares without diluting his voting control, he committed to stay in California for eight years.

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The Vote and the Bigger Fight

With roughly 71% of ballots tallied, the AP count showed 54% against and 46% for, and DDHQ projected on X that voters are expected to reject the measure. Backers had hoped California would set a model for taxing extreme wealth nationwide, but the likely defeat is a major setback. The debate split Democrats, labor and the state's business community between those who viewed the tax as a life saving stopgap and those who cautioned it would push wealthy residents, businesses, and capital to leave California.

And while voters balked at the tax, Tuesday's Democratic gains elevated candidates who campaigned on reining in the ultrawealthy's political clout and raising what they pay in taxes. In Texas, James Talarico pledged to close tax loopholes that primarily aid the nation's wealthiest people.

What Comes Next

Newsom, in his final term and seen as a 2028 presidential contender, argued the tax would erode the state's revenue base by pushing the ultrawealthy out. He has instead promoted a federal billionaire tax so people could not avoid it by moving across state lines. The union behind Proposition 40 is not done either. Dave Regan, president of SEIU UHW, said, "This is the right thing to do, and if necessary we will be back in 2028."

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