California voters reject billionaire wealth tax

California voters rejected a plan to impose a one-time 5% tax on the wealth of billionaires, according to a race call by The Associated Press. The measure, identified as Prop 40, sought to generate approximately $100 billion to fund healthcare services across the state. Estimates suggest the state is home to more than 200 billionaires, a figure some observers place even higher.

Supporters, led by the Service Employees International Union United Healthcare Workers, argued the tax was necessary to replace funding cut by a Republican-controlled Congress. They contended that wealthy Californians should help close the gap in healthcare spending. Opponents countered that the levy would drive high earners out of the state, reducing overall revenue and damaging the local economy.

The proposal created a visible rift within the California Democratic Party. While the state party organization, Representative Ro Khanna, and Senator Bernie Sanders campaigned in favor of the measure, Governor Gavin Newsom opposed it. Newsom favored a national wealth tax and suggested a state-specific levy was less ideal. Xavier Becerra, the Democratic candidate for governor, also voted against the proposal.

Financial backing heavily favored the opposition side. Sergey Brin, the Google co-founder, led a campaign spending surge that outpaced proponents by at least five to one. The campaign also introduced two additional ballot measures designed to block the tax from taking effect if it had passed. A major teachers union opposed Prop 40 as well, noting that only a small fraction of the projected revenue would be allocated to schools.

The result stands as a definitive rejection of the one-time wealth tax by the electorate. The campaign spending disparity and the split among Democratic leaders marked the final days of the midterms. No further action on the specific tax structure is scheduled by the state legislature.