California voters rejected a proposed tax on the state’s billionaires after some of Silicon Valley’s richest executives and investors spent $378.4 million to defeat it, handing a victory to a coalition led by Google co-founder Sergey Brin.
THE Associated Press announced the race Monday, with 52.8% of voters opposing Proposition 40 and 47.2% supporting it. The votes needed to pass the measure had dragged on for days.
The defeat means — at least for now — that efforts to make California the first state to impose a one-time tax on its billionaires have ended. It also represents a significant victory for Silicon Valley leaders who united to block the measure.
About 52.8% of voters opposed Proposition 40, while 47.2% supported it. According to CalMattersultra-wealthy opponents have collectively contributed $378.4 million to efforts against the tax and associated countermeasures like Propositions 41 and 42. This amount is more than 10 times the $33.5 million raised by Proposition 40 supporters.
The defeat means, at least for now, that efforts to make California the first state to impose a one-time tax on its billionaires have ended. It also represents a significant victory for Silicon Valley leaders who united to block the measure.
A measure to divide the Democratic Party
Proposition 40 would have imposed a one-time 5% tax on the net worth of people worth more than $1 billion who resided in California as of January 1, 2026. The proposed tax covered financial assets and other forms of wealth, rather than just income.
Under the proposal, around 90% of revenue would have been spent on health services, with the remaining 10% allocated to education and food aid. The Legislative Analyst’s Office estimates the measure could generate “tens of billions” of dollars.
The initiative was introduced by the Service Employees International Union-United Healthcare Workers West, which argued that California needs additional revenue to address the health care funding gap following federal spending cuts under President Donald Trump’s tax and spending legislation. The measure also received support from Vermont Sen. Bernie Sanders, U.S. Rep. Ro Khanna, the California Democratic Party and several labor organizations.
But not all Democrats and Californians were on the same page. The proposal faced opposition from prominent Democrats, including Gov. Gavin Newsom, who argued that a state-level wealth tax would push wealthy residents and their businesses out of the state. Instead, Newsom said he would support a national wealth tax. San Francisco Democrats also opposed the measure, voting 17-4 against Proposition 40 in August, while U.S. Rep. Nancy Pelosi, a local party member, voted “no approval.”
“Here’s what I support: a national tax on billionaires,” Newsom wrote in an article on Substack in June. “A true minimum tax on billionaires – a modern Buffett rule – that would ensure that those at the top pay at least the tax rate their own workers pay. »
The billionaire opposition campaign
The campaign against the proposal was funded by some of the most prominent figures in the technology, finance and investment sectors, with Brin becoming its largest individual backer.
Brin contributed about $102 million to Building a Better California, a political committee he created in January that has become the primary vehicle for opposition to the wealth tax. These contributions have made Brin one of the most important financial players in the fight for California’s 2026 elections. He moved to Nevada in December 2025, making his fortune, estimated at $231 billion by Bloomberg, potentially tax-exempt.
Eric Schmidt, former CEO of Google, has also been a major contributor to opposition efforts. According to campaign finance filings, he contributed $40.2 million to the campaign.
Other high-profile tech executives and investors also contributed millions, including DoorDash CEO Tony Xu, Stripe co-founder Patrick Collison, venture capitalist John Doerr, cryptocurrency entrepreneur Chris Larsen, and former Sequoia Capital partner Michael Moritz.
The wealth tax would have been abolished anyway
Contributions have also not been limited to Building a Better California’s fight against Proposition 40. Through October 20, Building a Better California has spent more than $304 million to support efforts to defeat Proposition 40 and advance Propositions 41 and 42, direct counterattacks to the wealth tax. Of that amount, about $118.5 million was spent opposing Proposition 40, while the remaining $186 million supported Propositions 41 and 42, according to Capital and main.
Proposition 41 “would require pre-election audits for initiatives proposing special taxes and additional audits every four years. It would also prohibit new tax revenue from being exempt from state spending limits,” making it harder for the state to use funds raised by the billionaires tax. Proposition 42 would “ban taxes on personal savings, assets, and retirement assets” – prohibiting retroactive taxation, directly countering Proposition 40. According to the Legislative Analyst’s Office, if either gets more “yes” votes than Proposition 40, the wealth tax could be eliminated even if it is approved.
And even though the wealth tax was not approved, a ballot measure intended to block it was. According to the P.A.Proposition 41 did not pass by voters while Proposition 42 did, meaning Proposition 40 would have been defeated if it had passed anyway.
According to PolicyMore than 70 current and former California billionaires have spent a record $612 million on this cycle’s national elections. Of that money, at least 30 billionaires contributed more than $293 million specifically to fighting the wealth tax.
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