California voters reject billionaire tax

Voters in California have rejected a proposed tax on billionaires, according to projections by the Associated Press news agency.

With about 60 percent of votes counted, the tax proposal appeared to be headed for defeat on Tuesday, with the “no” vote leading at 55.6 percent compared with 44.4 percent for “yes”.

The measure would impose a one-time 5 percent tax on Californians whose net worth exceeds $1bn.

Known as Proposition 40, the tax would have raised $100bn, most of which would have been earmarked for healthcare programmes, but education and food-assistance programmes would also receive funds.

It was championed by United States Senator Bernie Sanders and other progressive politicians as a remedy for economic inequality and a model for the rest of the country.

Democrats said the tax was necessary to offset federal funding cuts in President Donald Trump’s One Big Beautiful Bill.

However, outgoing California Governor Gavin Newsom, a likely candidate for the 2028 Democratic Party presidential nomination, came out against the measure.

Newsom and other opponents to Proposition 40 argued it would prompt ultrawealthy and high-tech entrepreneurs to leave California, taking their income-tax payments and job-producing enterprises with them.

Newsom’s opposition, as well as division among party leaders and labour unions, led initial support for the measure to wane ahead ⁠of the vote, which was held during the midterm elections.

Californian billionaires, including Google cofounder Sergey Brin, spent more than a quarter of a billion dollars campaigning against the measure, arguing it was a gateway to more aggressive taxation for all Californians and could target their retirement accounts.

The failure to pass the tax is a blow to the Democratic Party’s left wing, which has gained momentum after a so-called “blue tsunami” in the country’s midterm elections saw Democrats winning majorities in both chambers of the US Congress.

Incoming US Senate Finance Committee Chairman Ron Wyden has signalled, however, that taxing the ultrawealthy remains a central goal for the Democratic Party as a whole.

“The committee will redouble ‌its ‌efforts to ensure billionaires pay their fair share and hold tax cheats accountable,” he said in a November 4 statement outlining the panel’s priorities.