California voters rejected Proposition 40’s one-time tax on billionaire fortunes, handing progressives a clear loss after a bitter fight over the state’s economy and jobs.
The Associated Press determined Monday that the “no” side had locked up enough ballots to win, days after voting closed on Nov. 3. Final tallies put the defeat at 52.8% to 47.2%, according to the New York Post.
Proposition 40 would have imposed a one-time 5% levy on the net worth of Californians above $1 billion. Backers cast it as a fix for lost federal health money. Opponents warned it would drive out the very taxpayers who fund the state.
That warning carried the day. Even in deep-blue California, voters refused to treat private wealth as a permanent state ATM.
Gov. Gavin Newsom and other Democratic leaders opposed the measure. Progressive icons did not.
Sen. Bernie Sanders barnstormed California cities in the closing weeks and urged a yes vote. He has long backed a federal wealth tax, as has Sen. Elizabeth Warren.
Days before those rallies, Newsom told reporters that Sanders’ focus on wealth inequality was “spot-on.” Then he drew a hard line.
The governor said ABC7 and the Associated Press reported:
"on this issue, we fundamentally disagree."
Newsom argued a California-only wealth tax would put the state at a disadvantage. He prefers a national minimum tax on anyone with a net worth above $100 million. That stance now sits against early 2028 primary ads that already hit him in New Hampshire, New Mexico, and Virginia for opposing Prop 40.
SEIU United Healthcare Workers West backed the tax. The union said California faces an estimated $100 billion loss in federal healthcare funding over five years and needed the revenue to backfill most of that hole. Ten percent of the take would have gone to education and food aid.
The “no” campaign outspent the “yes” side by roughly ten to one. Building a Better California, the main opposition PAC, raised more than $333 million. Google co-founder Sergey Brin alone put in more than $100 million, nearly a third of that total. Tech figures Eric Schmidt and Peter Thiel also gave.
Brin and fellow Google co-founder Larry Page were already cutting ties with the state as the measure loomed. Meta’s Mark Zuckerberg said he would stay eight years and arranged a company deal to cover any tax hit without surrendering his ownership stake.
A coalition that included Planned Parenthood and the California Medical Association joined the opposition. Their concern was simple: if the ultrawealthy left, the budget would shrink and revenue fights would intensify.
The coalition stated:
"Proposition 40 was a reckless experiment conducted on our state's economy with little regard for the harms it would cause,"
Opponents also told the Los Angeles Times the measure risked California’s economic competitiveness and fiscal stability, plus the money needed for education, healthcare, public safety, and infrastructure.
An AP Voter Poll sketched the split. A majority of California voters under 30 backed the tax. Roughly seven in ten voters 65 and older voted no. About half of households under $100,000 a year supported it. Closer to six in ten voters at $100,000 or more opposed it.
Geography matched the pattern. Los Angeles County and San Francisco County posted yes votes of 55% and 56.2%. Orange County and San Diego County went no at 59.3% and 54.3%.
Robert Swonger, an auto glass technician living near Sacramento and a political independent, put the middle-ground view in plain terms before ballots closed. He planned to vote against the measure.
Swonger said:
"Obviously, I would like billionaires not to have as much money as they do,"
He added:
"But I don't believe taxing them out of existence is going to work."
The Yes on 40 campaign did not immediately respond when asked for comment after the race was called.
Most Californians vote by mail. Ballots postmarked by Election Day and arriving within a week still count. That slow trickle did not save Prop 40. By Monday the AP had seen enough to declare the “no” side the winner.
Supporters already talk about trying again in 2028. The same incentives remain: a union seeking replacement federal dollars, progressive politicians hunting a national template, and a state budget that never stops growing. The same problem remains too. Capital can leave. Taxpayers notice.
Newsom may still chase a 2028 presidential bid. His split with Sanders on this tax will follow him into early primary states where those critical ads already ran. California voters just showed that even a deep-blue electorate can reject a first-in-the-nation wealth grab when the price looks like lost jobs and a weaker tax base.
When the people who actually pay the bills refuse to be treated as a permanent revenue experiment, the left’s favorite solution meets the only test that counts, an election.
