
California voters rejected a proposed tax on billionaires even as Democrats won control of Congress and scored victories in statewide races in the midterm elections.
Newsmax projected Monday that California voters had rejected Proposition 40, nearly a week after Election Day. With about 82% of the vote counted, 52.9% opposed the proposal and 47.1% supported it.
The tax would have imposed a one-time 5% levy on residents with a net worth of at least $1 billion.
Two competing ballot measures sought to restrict wealth taxes or impose added requirements on new state taxes. Under California law, when conflicting propositions pass in the same election, the provisions of the measure receiving more affirmative votes generally prevail.
Proposition 42, which would prohibit certain new taxes on personal wealth and retroactive taxes, remained undecided Monday night. With 87% of the ballots counted, 51.7% supported the measure and 48.3% opposed it.
Proposition 41, which would restrict certain new taxes, was defeated, with 54.8% voting against it and 45.2% in favor, according to Decision Desk HQ.
The campaign over Proposition 40 and the two competing measures was among the most expensive ballot-measure fights in California history, the Los Angeles Times reported Monday.
More than $400 million was spent on the three measures, with more than 90% going toward efforts to defeat the billionaire tax, according to campaign finance disclosures filed with the California secretary of state's office.
Billionaires, including Google co-founder Sergey Brin, contributed hundreds of millions of dollars to groups that financed advertising campaigns against the tax. Brin alone contributed $102 million.
Gov. Gavin Newsom, the California Teachers Association, and Planned Parenthood Affiliates of California were among the prominent Democrats and Democrat-aligned groups that expressed concerns about the proposal, including the possibility that billionaires would leave the state.
The Times reported that some billionaires, including Brin and fellow Google co-founder Larry Page, moved out of California amid concerns about the proposed tax.
Ads opposing the billionaire tax argued that it could affect all Californians, not just the ultra-wealthy. Advertisements featured teachers, firefighters, and other middle-class Californians arguing against the proposal, the Times reported.
Opponents of Proposition 40 said Californians made the "right decision," calling the proposal a "reckless experiment" that would hurt the state's economy. The coalition included the California Medical Association, California Primary Care Association, and California School Boards Association.
"Proposition 40 risked California's economic competitiveness and fiscal stability, as well as the revenue we rely on to fund our top priorities — from education and healthcare to public safety and infrastructure," the group said, according to the Times.
Leaders of the Service Employees International Union-United Healthcare Workers West, which sponsored Proposition 40, vowed to pursue another billionaire tax measure in 2028 unless state leaders find other ways to support healthcare, the Times reported.
California lawmakers face a difficult budget outlook next year, raising questions about how the state could replace an estimated $100 billion in federal healthcare funding cuts, according to the Times.
Supporters said the proposed tax on more than 200 California billionaires was intended to raise $100 billion, with 90% of the revenue going to healthcare and the remaining 10% to schools and food assistance.
"Billionaire-funded propaganda may have influenced the outcome of this election, but as hospitals reduce services, emergency rooms close and families lose access to care, the truth will become increasingly difficult to hide," Suzanne Jimenez, chief of staff for the SEIU-UHW, told the Times. "Californians will see for themselves what was at stake."
At the federal level, Sen. Bernie Sanders, I-Vt., and Rep. Ro Khanna, D-Calif., who backed Proposition 40, are pushing for an annual 5% tax on American billionaires. Earlier this year, they introduced the Make Billionaires Pay Their Fair Share Act.
Michael Katz ✉
Michael Katz is a Newsmax reporter with more than three decades of experience reporting and editing on news, culture, and politics.
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