California voters rejected Proposition 40, a proposed one-time 5% tax on the net worth of residents with more than $1 billion. The Associated Press called the measure’s defeat on November 9, reporting that 52.8% voted against it and 47.2% supported it.
The proposal would have directed most of its revenue toward healthcare, with 10% allocated to education and food assistance. SEIU United Healthcare Workers West, a backer of the measure, said the tax was needed to help replace an estimated $100 billion in federal healthcare funding California could lose over five years.
Opponents argued that the tax could prompt wealthy residents to leave and put pressure on a state budget that relies heavily on income taxes paid by its richest residents. Governor Gavin Newsom opposed the California measure, while supporting a national minimum tax for people with net worth above $100 million.
Campaign spending and political divisions
Opponents significantly outspent supporters. A committee working to defeat Proposition 40 raised more than $333 million, with Google co-founder Sergey Brin contributing more than $100 million, according to France 24. The campaign against the tax raised roughly 10 times as much as the campaign supporting it.
The vote drew attention beyond California as progressives have backed wealth taxes targeting investments, a major source of income for the ultra-rich. Senator Bernie Sanders campaigned for the measure in California, while Newsom said he disagreed with Sanders on the state proposal.
With most ballots cast by mail, counting can continue after Election Day. The AP’s reported result showed the initiative had failed, making California’s vote a setback for supporters of taxing billionaires’ wealth through a state ballot measure.
Reid Bentley