California's billionaire tax heads for defeat after $317M campaign against it
What happened? California's Proposition 40, a one-time 5% tax on the net worth of the state's roughly 200 billionaires, was heading for defeat after the 3 November 2026 midterm vote. With about 60% of ballots counted, No led by 55.6% to 44.4%, according to the Associated Press, and a San Francisco Chronicle analysis found the result unlikely to change. Prop 42, a rival measure that would ban wealth taxes in California and nullify Prop 40 if it gets more votes, was passing with about 54%. Counting is still under way.
The case for: The measure was written by the SEIU-UHW healthcare workers' union, which said it would raise about $100 billion over five years for healthcare and education as federal cuts are expected to take health insurance away from about 2 million Californians. The California Democratic Party and the state labour federation backed it. Economist Joseph Stiglitz said it was the first time a tax on billionaire wealth had been put to US voters. Union president Dave Regan said they would try again in 2028 if the legislature does not find another way to fund healthcare.
The case against: Governor Gavin Newsom, who endorsed Prop 42, and Democratic allies including the California Teachers Association argued a one-time tax would not fix the state's finances and would push wealthy residents to leave. The nonpartisan Legislative Analyst's Office put revenue at "tens of billions of dollars", well below the union's figure, and said billionaires leaving could cut income tax receipts by less than $1 billion a year. Billionaire opponents and business groups spent $316.7 million against Prop 40, including on the rival measures, according to CalMatters. Google co-founder Sergey BrinDealroom has a profile for this one. Try Dealroom → led that effort with $102 million and publicly moved out of the state. CalMatters called the campaign's claim that lawmakers could later extend the tax to ordinary Californians largely misleading.
The debate online: As votes were counted, X users argued over whether billionaires are a by-product of prosperity. Adam Singer wrote that "you don't make anyone richer by making builders poorer", sharing a chart from Econ Chris Clarke that plots Forbes 2026 billionaire counts against World Bank poverty data for 64 countries: where billionaires per person are more common, far fewer people live on under $30 a day (R² of 0.58). James Clark argued that opponents of billionaires end up choosing more poverty. The chart shows a cross-country correlation; on its own it does not show whether billionaires reduce poverty or whether both follow from countries growing richer. California voters have now rejected a wealth tax three times this decade, AFP notes.
Read more: CalMatters, AFP, New York Times results, Adam Singer (X), James Clark (X)
Images: California State Capitol, Sacramento (Flickr user livenature, CC BY-SA 2.0, via Wikimedia Commons); chart by Chris Clarke (Econ Chris Clarke), shared by Adam Singer on X
