SACRAMENTO, California — The Associated Press has called California Proposition 40 defeated, ending the most expensive ballot fight in state history and closing the book on a first-in-the-nation one-time 5 percent tax on the net worth of California billionaires. With about 83 percent counted, voters were rejecting the measure 52.8 percent to 47.2 percent, the California Secretary of State reported — 5,789,026 votes against and 5,159,356 in favour — a margin of more than 629,000 votes that the AP determined on Monday, November 9, could not be overcome.

Key Points

• The Associated Press called Proposition 40 defeated on Monday, November 9, six days after the November 3 vote: "no" led 52.8 percent to 47.2 percent at about 83 percent counted.
• It would have imposed a one-time 5 percent tax on Californians worth more than $1 billion, raising about $100 billion over five years, mostly for health care.
• Opponents spent about $379 million — roughly ten times what supporters raised — with Google co-founder Sergey Brin alone giving more than $100 million.
• It is a win for Governor Gavin Newsom and Democratic leaders who opposed it; backers say a similar tax could return in 2028.
• San Francisco was an exception, backing the measure by about 56 percent to 44 percent; rival Proposition 42, which would ban retroactive wealth taxes, led with 51.6 percent but was uncalled.

What Happened

The call came six days after Californians voted in the November 3 midterm elections, a delay that reflects how long California takes to count its ballots. Millions of mail-in ballots arrive after Election Day and must be verified, so results trickle in for weeks. When we last reported on the measure on November 5, it was trailing with 55.6 percent voting "no" at about 60 percent counted, and no outlet had yet called the race. By Monday, with the count at about 83 percent, the "no" lead had narrowed to 52.8 percent — but the AP concluded the remaining ballots could not close a gap of more than 629,000 votes. Proposition 40 was the first proposal of its kind anywhere in the United States, a direct tax on accumulated wealth rather than on income.

California Proposition 40: What the Billionaire Tax Would Have Done

Proposition 40 would have imposed a one-time 5 percent tax on the net worth of California residents worth more than $1 billion, based on residency on January 1, 2026. Only about 200 people would have been affected, but the sums were huge: the ten wealthiest Californians alone faced a combined bill of about $31.5 billion, including roughly $10.9 billion from Meta chief executive Mark Zuckerberg and about $9.5 billion from Nvidia chief executive Jensen Huang. The tax would have covered stocks, bonds, cash and business interests, while real estate and most retirement accounts were generally excluded. Supporters projected about $100 billion over five years, with 90 percent going to health care and the rest to education, food assistance and administration.

The measure was championed by Senator Bernie Sanders and the SEIU United Healthcare Workers West union, which put it on the ballot, to offset federal funding cuts in President Donald Trump's One Big Beautiful Bill and as a model for the country. But it split California's Democrats: Governor Gavin Newsom opposed it, arguing it would drive ultrawealthy residents and tech entrepreneurs out of the state, taking their income-tax payments and jobs with them. An October 29 UC Berkeley/LA Times poll found 50 percent opposed and 42 percent in favour.

Reactions: What Supporters and Opponents Said

The campaign against the measure was among the most heavily funded in American ballot history. Building a Better California, the main opposition committee, raised more than $333 million, and opponents spent about $379 million in total — roughly ten times what supporters raised. Brin alone contributed more than $100 million. Opponents argued the tax was a gateway to more aggressive taxation for all Californians and could eventually target retirement accounts.

The defeat is a blow to the Democratic Party's left wing, which had gained momentum after Democrats won majorities in both chambers of Congress in the midterms. But the party's incoming Senate Finance Committee chairman, Senator Ron Wyden, signalled that taxing the ultrawealthy remains a central goal. "The committee will redouble its efforts to ensure billionaires pay their fair share and hold tax cheats accountable," Wyden said in a November 4 statement. Backers have not conceded the idea itself: SEIU United Healthcare Workers West said it could put a similar tax back on the ballot in 2028, betting a presidential-year electorate might produce a different result.

Why It Matters

The result matters far beyond California. The state has more billionaires than any other, and Proposition 40 was designed as a test case: if a wealth tax could pass anywhere, supporters believed, it could pass here. Its failure — by nearly six points, after opponents outspent supporters by roughly ten to one — will be studied by both sides of the wealth-tax debate. It also leaves a roughly $100 billion hole in promised health-care funding, as federal cuts squeeze state budgets. The vote exposed a fault line inside the Democratic Party: nationally the left is ascendant after the midterms, yet in California its flagship economic proposal was rejected, including by double digits in many of the state's largest counties. Only San Francisco, which backed it by about 56 percent to 44 percent, was an exception.

What Happens Next

Attention now turns to Proposition 42, the rival measure that would ban retroactive wealth taxes. It led with 51.6 percent but was uncalled; if it passes, it would bar the state from ever imposing a tax like Proposition 40 retroactively. For supporters, the next move is already being discussed: a fresh attempt in 2028, when presidential-year turnout brings a larger and younger electorate. And in Washington, Wyden's Finance Committee is expected to keep wealth taxation at the centre of the Democratic agenda.

Frequently Asked Questions

What was California Proposition 40?
A ballot measure that would have imposed a one-time 5 percent tax on the net worth of California residents worth more than $1 billion, raising about $100 billion over five years, mostly for health care.

By how much did Proposition 40 lose?
With about 83 percent counted, voters rejected it 52.8 percent to 47.2 percent — 5,789,026 against, 5,159,356 in favour. The Associated Press called it on Monday, November 9.

Who opposed it and how much did they spend?
Opponents, led by the committee Building a Better California, spent about $379 million — roughly ten times what supporters raised. Google co-founder Sergey Brin alone gave more than $100 million. Governor Gavin Newsom also opposed it.

What happens to the $100 billion now?
Nothing is collected. The tax only applied if voters approved it, so the projected $100 billion for health care, education and food assistance will not be raised.

Could a billionaire tax come back?
Yes. Backers SEIU United Healthcare Workers West said they could try again in 2028, and Senator Ron Wyden has signalled that taxing the ultrawealthy remains a Democratic priority in Congress.

Read our pre-election report on Proposition 40 and our coverage of Xavier Becerra's win in the California governor's race.