California voters rejected Proposition 40, a proposed one-time tax on the state’s billionaires, according to an election projection by CBS News. The measure would have imposed a 5% levy on residents with a net worth of at least $1 billion, with real estate and certain retirement assets excluded.
The vote took place on Nov. 3, 2026. The reported count showed 52.8% opposed and 47.2% in favor, with ballots still being processed after Election Day, according to The Associated Press.
Supporters and opponents split over costs and revenue
Supporters said Proposition 40 could raise $100 billion over five years. Under the proposal, 90% of the money would go to health programs, while the remaining 10% would fund education, food assistance and administration of the tax.
Backers argued that the revenue could help protect hospitals, clinics, emergency rooms and Medi-Cal services from federal health funding cuts enacted in 2025 under H.R. 1, known as the “One Big Beautiful Bill Act.” They also said billionaires can see their wealth grow through stocks and business valuations without paying income tax on those gains until they are realized.
The proposal drew support from the California Democratic Party and SEIU Healthcare Workers West, its principal sponsor. Gov. Gavin Newsom and former U.S. Rep. Katie Porter opposed it, arguing that a state-only wealth tax could drive wealthy residents away and weaken California’s long-term tax base.
Newsom has said he prefers a federal approach to taxing billionaires. Opponents also raised concerns that the initiative did not guarantee how funds would be distributed among health providers and services.
The campaign exposed divisions among groups that often share political priorities. The California Medical Association and California Teachers Association also opposed the measure, while Nvidia CEO Jensen Huang was among the billionaires who supported it. Huang told CBS News he was willing to pay taxes but did not want tax dollars wasted.
Reid Bentley 
Nicole French