California rejects billionaire tax proposal in win for executives, Newsom

California voters are rejecting a proposal to impose a wealth tax on billionaire residents , marking a major win for tech and business executives, who spent hundreds of millions against the measure, according to a projection from Decision Desk HQ (DDHQ).

According to DDHQ’s analysis, 54 percent voted against the measure, while 46 percent voted for it, with 76 percent of the total counted as of 8:51 p.m. EST.

Proposition 40 would have instituted a one-time 5 percent tax on billionaires’ wealth in a nationwide first. The government revenue from the wealth tax would have largely gone to state healthcare programs, with the remainder going to food assistance and education initiatives.

Preelection polling showed more California voters opposed the proposal, though the projections were tight.

The wealth tax proposal split California Democrats. The state Democratic Party and AFL-CIO and Teamsters unions supported the proposition, while Gov. Gavin Newsom (D) came out against it.

The term-limited governor said he supports a federal billionaire tax but took issue with the proposal dedicating “almost all of the revenue” from the tax to healthcare.

“There is nothing for housing, nothing for childcare, nothing for public safety workers who must answer 911 calls, and nothing for our public universities that have powered California’s economy for a decade,” Newsom wrote in a Substack post in June, adding, “This is not how we should set California’s budget priorities.”

California billionaires, including many Silicon Valley executives, lobbied against the measure, giving more than $333 million to the nonprofit Building a Better California.

An analysis from the nonpartisan state Legislative Analyst’s Office found California would have collected tens of billions of dollars by imposing the tax on the roughly 200 billionaires in the state.