Billionaire tax rejected on concern squeezing California's ultra-rich would harm the economy

Résumé détaillé

Supporters of Proposition 40, a proposal to tax California billionaires to mostly fund healthcare, faced opposition from politicians, a teachers union and other powerful groups before residents cast their votes.

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California voters have officially rejected the controversial billionaire tax.

Proposition 40 sought to impose a one-time 5% tax on California billionaires’ assets to try to offset federal healthcare funding cuts.

Despite the blue wave in the midterm elections, the novel tax on the ultra-wealthy had trailed from the first day of vote counting and was officially rejected on Monday. Roughly 53% of California voters voted against the measure while 47% voted for it, the Associated Press said as it declared that California voters had rejected the measure.

Although the tax was rejected in the vast majority of counties, the final tally showed major pockets of support in Los Angeles and San Francisco — home to the lion’s share of the state’s 200 billionaires. Orange County, however, voted no by a wide margin.

The political battle over the ballot measure and two competing proposals divided the state and was among the most expensive in California history. More than $400 million had been spent on the three intertwined ballot measures, with more than 90% spent opposing the billionaire tax, according to fundraising disclosures filed with the secretary of state’s office.

Billionaires, notably Google co-founder Sergey Brin, poured hundreds of millions of dollars into groups that funded ads to kill the billionaire tax. California Gov. Gavin Newsom, the California Teachers Assn. and Planned Parenthood Affiliates of California are among the powerful Democrats and other Democrat-aligned groups that expressed fears that billionaires would flee the state. Some, including Brin and fellow Google co-founder Larry Page, moved out of California because of the proposal.

Campaigns supporting and opposing the billionaire tax proposal are paying social media influencers, some with millions of followers, to post videos to inform and sway voters.

Opponents of Proposition 40 said Californians made the “right decision,”…

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