Published: 10 November 2026 | USA 247 Trend Post
California voters have rejected Proposition 40, the first-in-the-nation ballot measure that would have imposed a one-time 5% tax on the net worth of the state's billionaires. The Associated Press called the race for the "no" side on Monday, 9 November 2026, ending one of the most expensive ballot campaigns in American history — and handing a major defeat to supporters of taxing concentrated wealth.
With about 83% of ballots counted on Monday evening, the "no" vote led 52.8% to 47.2%, according to the AP's count. That translated to roughly 5.91 million votes against the measure and 5.29 million in favour, a margin of about 621,000 votes. The AP declared the lead irreversible and called the result at 6:28 p.m. Pacific time on Monday, according to KQED.
The short version: a populist idea with strong support among young voters could not survive a $378 million opposition campaign, opposition from California's own Democratic leadership, and the doubts of older voters. The measure's backers say they may try again in 2028. For now, though, the nation's biggest test of a wealth tax has failed — and the debate it started is far from over.
Table of Contents
- 1. The Result: What the AP Called and When
- 2. What Proposition 40 Would Have Done
- 3. The $378 Million Campaign: How the 'No' Side Won
- 4. Why California's Democratic Leaders Opposed It
- 5. The Generational Split: Young Voters Said Yes, Older Voters Said No
- 6. Proposition 42: The Counter-Measure Still Uncalled
- 7. What Happens Next: 2028 and the National Debate
- Frequently Asked Questions
1. The Result: What the AP Called and When
Proposition 40 was on the ballot in California's statewide election on Tuesday, 3 November 2026, the same day voters across the country cast ballots in the midterm elections. But unlike many races decided on election night, the billionaire tax took six days to call. California counts mail ballots for days after election day, and the AP waited until Monday evening, when about 83% of the expected vote had been counted, before determining that the "no" side had an irreversible lead.
The final numbers reported on Monday were 52.8% against and 47.2% in favour. The count is not yet final: the California Secretary of State certifies the result on 11 December, and late-arriving ballots will continue to be counted. But the margin of more than 600,000 votes was far too large for the remaining ballots to overturn, which is why the AP was able to call the race.
The result came on a day when California's election had already delivered surprises. The same voters who rejected the billionaire tax had, a week earlier, delivered a Democratic wave in the midterm elections that flipped control of both chambers of Congress. As Le Monde put it, the blue wave that swept the country on 3 November "did not extend to the fortunes of California's richest residents."
2. What Proposition 40 Would Have Done
Proposition 40 was a constitutional amendment that would have imposed a one-time tax of 5% on the net worth of Californians worth more than $1 billion. The tax would have applied retroactively to anyone who was a California resident on 1 January 2026, and it would have covered roughly 200 billionaires living in the state — the largest concentration of ultra-wealthy residents anywhere in the United States.
Supporters said the measure would have raised about $100 billion. Most of that money would have been used to backfill federal funding cuts to healthcare — specifically Medi-Cal, California's Medicaid programme, which provides healthcare to qualifying low-income residents. The state is expected to lose an estimated $100 billion in federal healthcare funding over five years, and the tax was presented as the way to replace it. A further 10% of the revenue would have gone to education and food-assistance programmes.
The measure was designed by French-American economists Gabriel Zucman and Emmanuel Saez, two of the world's best-known advocates of taxing extreme wealth, and it was backed by SEIU United Healthcare Workers West, the healthcare workers' union. Its supporters argued that it was time to tax the ultra-rich on the main way they make their money — through their investments — rather than only on the paychecks they receive from work.
For supporters, the measure was about more than California's budget. They hoped a win in the nation's most populous state would launch a global debate about taxing billionaires and prove that a wealth tax could survive at the ballot box. That hope is now on hold.
3. The $378 Million Campaign: How the 'No' Side Won
The campaign against Proposition 40 was one of the most expensive in the history of American ballot measures. According to a CalMatters tally reported on 9 November, opponents spent $378.4 million against the measure — more than ten times the $33.5 million raised by the "yes" campaign.
The biggest single contributor was Google co-founder Sergey Brin, who put more than $100 million into the effort to defeat the tax. Much of that money flowed through a political action committee called Building a Better California, which raised more than $333 million — nearly a third of it from Brin alone — and ran a multi-pronged media campaign designed to discredit the measure. Other tech billionaires also contributed, turning the campaign into a direct contest between organised labour and some of the wealthiest people in the world.
The "no" campaign's central argument was that the tax would drive billionaires — and their businesses, jobs and tax revenue — out of California. Critics said that a retroactive, one-time levy on net worth would punish people for wealth they had already accumulated and would prompt ultra-wealthy taxpayers to relocate to states with no income tax, such as Texas or Florida. Supporters countered that few billionaires would actually leave, and that the state's healthcare system needed the money more than the billionaires did.
The spending gap was visible everywhere: television adverts, digital campaigns, mailers and door-to-door canvassing. The "yes" side, backed mainly by the healthcare workers' union, could not match the scale of the opposition's advertising. In the end, the money gap mattered — but so did the political opposition from within the Democratic Party itself.
4. Why California's Democratic Leaders Opposed It
One of the most striking features of the Proposition 40 campaign was that it was opposed not only by billionaires and business groups, but by California's own Democratic leadership. Governor Gavin Newsom opposed the measure, as did Xavier Becerra, who was elected governor on the same day the tax was voted down.
Newsom and other Democratic leaders argued that a state-level wealth tax could damage California's economy and drive wealthy residents to relocate, taking their income-tax payments with them. California already relies heavily on high earners for its tax revenue, and the governor's office has long worried about the state's dependence on a small number of very wealthy taxpayers. A tax designed to punish them, the argument went, could backfire by pushing them out.
The failure of the measure is therefore a political victory for Newsom, who may run for president in 2028, and for the Democratic establishment in California. It also reveals a split inside the Democratic Party: the party's progressive wing, organised labour and young activists supported the tax, while its elected leadership opposed it. That split is likely to shape the party's internal debates for years to come.
Supporters of the tax noted the irony: a measure designed to fund healthcare and help low-income Californians was defeated with the help of the Democratic governor it was supposed to help. Critics of the tax replied that the governor was protecting the state's economy — and its tax base — from a policy that would have done more harm than good.
5. The Generational Split: Young Voters Said Yes, Older Voters Said No
The AP Voter Poll, conducted around the election, revealed a sharp generational divide on Proposition 40. A majority of young voters in California — those under 30 — voted "yes" on the measure. Older voters were far less supportive: roughly 7 in 10 voters aged 65 and older said they voted "no".
That split helps explain both the result and the debate that will follow it. Younger voters, who came of age during a period of rising inequality, stagnant wages and unaffordable housing, were far more willing to support a direct tax on extreme wealth. Older voters, many of whom own homes that have appreciated enormously in value and who are more sensitive to arguments about tax flight and economic damage, were far more sceptical.
The generational divide also points to the future of the wealth-tax debate. As younger voters become a larger share of the electorate, support for taxing billionaires may grow — even if the idea lost this time. Backers of the measure have already said they could put a similar tax back on the ballot in 2028, when the electorate will be somewhat younger and the political landscape may have shifted.
For now, though, the poll numbers are a reminder that the politics of taxing the rich is more complicated than the slogans suggest. Even in deep-blue California, in an election that delivered a Democratic wave nationally, a majority of voters said no to a tax that would have affected only about 200 people.
6. Proposition 42: The Counter-Measure Still Uncalled
Proposition 40 was not the only wealth-tax measure on California's ballot. Proposition 42, a counter-referendum launched by Sergey Brin, would ban retroactive taxes — effectively making measures like Proposition 40 impossible in the future. It was also on the ballot on 3 November.
As of Monday evening, Proposition 42 was leading with 51.6% of the vote to 48.3%, with about 83% of ballots counted. But unlike Proposition 40, the AP had not yet called the result, because the margin was not large enough to be declared irreversible. If Proposition 42 passes, it would close the door on future attempts to impose a retroactive wealth tax in California — a result that would make the defeat of Proposition 40 permanent in a legal sense, not just a political one.
The two measures were designed to work as a pair: Proposition 40 to impose the tax, Proposition 42 to make sure it could never be imposed. The fact that Brin funded both sides of the strategy — the campaign against Proposition 40 and the campaign for Proposition 42 — shows how seriously the state's billionaires took the threat. For the supporters of the wealth tax, losing Proposition 40 was bad enough; losing Proposition 42 as well would make their 2028 comeback far harder.
7. What Happens Next: 2028 and the National Debate
The defeat of Proposition 40 does not end the debate about taxing billionaires — but it changes it. Supporters say they may put a similar measure on the ballot in 2028, when the electorate will be different and the campaign may be better funded. But they will have to reckon with the lessons of this campaign: the enormous spending gap, the opposition of Democratic leaders, and the scepticism of older voters.
Nationally, the result will be studied by both sides. Progressives have long championed the wealth tax as the centrepiece of their economic programme, and California was supposed to be the proving ground. Its failure will be cited by critics as proof that voters — even liberal voters — do not want it. Supporters will reply that a $378 million opposition campaign, funded by the very people the tax would have hit, is not a fair test of public opinion.
The result also matters for the 2028 presidential race. Governor Newsom, who opposed the tax, emerges with his standing among business leaders and moderate Democrats strengthened. The progressive wing of the party, meanwhile, will be asking whether the Democratic establishment is willing to fight for the policies its own base supports. That argument is only just beginning.
For California itself, the immediate question is the budget. The state still faces an estimated $100 billion shortfall in federal healthcare funding over five years, and the money Proposition 40 would have raised is now off the table. Lawmakers will have to find another way to fund Medi-Cal — through spending cuts, other taxes, or a combination of both. That debate starts now.
FAQs About Proposition 40 and the California Billionaire Tax
What was Proposition 40?
Proposition 40 was a California ballot measure that would have imposed a one-time 5% tax on the net worth of state residents worth more than $1 billion, applying retroactively to anyone who lived in California on 1 January 2026. It was rejected by voters, with the Associated Press calling the result on 9 November 2026.
How much money would the tax have raised?
Supporters estimated the tax would have raised about $100 billion from roughly 200 billionaires. Most of the money would have gone to healthcare funding, mainly Medi-Cal, with 10% earmarked for education and food-assistance programmes.
Why did Proposition 40 fail?
The "no" campaign spent about $378 million — more than ten times the $33.5 million raised by supporters — and was opposed by Governor Gavin Newsom and other Democratic leaders. Critics argued the tax would drive billionaires out of the state. The AP Voter Poll also showed older voters strongly opposed the measure, while younger voters mostly supported it.
What is Proposition 42?
Proposition 42 is a separate ballot measure, backed by Google co-founder Sergey Brin, that would ban retroactive taxes in California. It was leading 51.6% to 48.3% as of Monday evening but had not yet been called by the Associated Press.
Could the billionaire tax come back?
Supporters have said they could put a similar measure on the ballot in 2028. Whether that happens will depend on the final result of Proposition 42, the political climate, and whether backers can close the enormous fundraising gap they faced this time.
#Proposition40 #California #BillionaireTax #USElection #USPolitics #WealthTax #GavinNewsom #TrendingNow
