California rejects 5% billionaire tax in decisive vote
Voters turned down Prop 40 despite a $100 billion promise, ending a campaign that split the state's Democratic establishment.
By Alexei Brooks ·
California voters defeated Prop 40, a measure that would have imposed a one-time 5% tax on the wealth of the state's billionaires. The Associated Press called the race, confirming that the proposal to raise approximately $100 billion for healthcare failed to secure enough support.
The proposal was championed by the Service Employees International Union United Healthcare Workers, which argued that federal cuts to healthcare programs required wealthy Californians to fill the financial gap. Estimates place the number of billionaires in the state at more than 200, making California a central battleground for the tax.
The measure fractured the state's Democratic Party. While Rep. Ro Khanna and Sen. Bernie Sanders campaigned in support, Gov. Gavin Newsom and gubernatorial candidate Xavier Becerra opposed the tax. Newsom argued that a national tax on the wealthy would be a better solution than a state-level measure.
Opposition forces coordinated a massive spending effort. Google co-founder Sergey Brin led a group of wealthy Californians in funding a campaign that spent at least five times more against the measure than proponents did. Brin also pushed two other ballot initiatives designed to block the tax if voters had approved it.
A leading teachers union also voted against the proposal, noting that only a small fraction of the projected revenue was designated for schools. Opponents maintained that the tax would drive wealthy residents out of state, ultimately reducing the state's overall revenue and harming its economic base.
