SACRAMENTO, California — California voters have rejected Proposition 40, the one-time 5 percent tax on billionaires that would have been the first wealth tax of its kind in the United States, the Associated Press reported on Monday, November 9, calling the race nearly a week after the November 3 election. With most of the vote counted, 52.8 percent of voters opposed the measure and 47.2 percent supported it, according to the tally cited by the New York Times. The result settles the question this site's November 3 preview left open: the tax that could have won a majority and still been blocked by rival measures has instead been defeated outright.
The California Secretary of State's tally on Monday night showed 5,789,026 votes against the measure (52.9 percent) and 5,159,356 in favour (47.1 percent), with counting still under way and the results unofficial until certification. San Francisco was a notable exception to the statewide verdict: voters there backed Proposition 40 by roughly 56 percent to 44 percent, according to the city's Department of Elections tally.
Source: California Secretary of State tally via Focal News, Nov. 10, 2026
What Proposition 40 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 — a little over 200 people, who together hold roughly $2 trillion in wealth. It was written to apply to anyone who was a California resident on January 1, 2026, with net worth measured on December 31, 2026, the tax falling due in 2027 with an option to spread payment over five years at additional cost. Ninety percent of the money was earmarked to protect or expand Medi-Cal, California's Medicaid programme for low-income residents, and the remaining 10 percent would have gone to a new fund subsidising public K-12 education and two years of community college.
Source: Reason, Nov. 9, 2026; TechCrunch, Nov. 9, 2026
One of the most expensive tax fights in state history
The campaign drew extraordinary money. The Associated Press reported that the No side raised roughly ten times as much as the Yes side, which raised about $33.5 million; campaign-committee filings cited by Reason put committees opposing the tax at approximately $130 million raised. A CalMatters tally reported by Vantage put total opposition spending at $378.4 million, including $102 million from Google co-founder Sergey Brin, spread across a multi-pronged campaign against the measure and its rival-measure allies. Supporters, led by the healthcare workers' union SEIU-United Healthcare Workers West, which placed the measure on the ballot, never came close to matching that spending.
Source: Associated Press via TechCrunch, Nov. 9, 2026; CalMatters tally via Vantage, Nov. 10, 2026
Why supporters said California needed it
The measure was designed by UC Berkeley economists Emmanuel Saez and Gabriel Zucman and backed by Senator Bernie Sanders, Representative Ro Khanna and the California Democratic Party. Backers estimated it could raise about $100 billion over five years, most of it to offset federal cuts to healthcare funding. Saez told TechCrunch before the vote that fears the tax would force founders to give up control of their companies were unfounded, arguing that shares can be structured so that economic ownership is diluted without surrendering voting control, and pointing out that the state currently takes in only about $3 billion a year from its billionaire class — roughly 1 percent of total state revenue.
Source: TechCrunch interview with Emmanuel Saez, Nov. 9, 2026
Why opponents said it would backfire
Governor Gavin Newsom opposed the measure from the start, warning in January that a one-time tax “does not solve an ongoing structural challenge” and would reduce investment in education, childcare, firefighting and police. The state's nonpartisan Legislative Analyst's Office was more cautious than the backers, projecting “tens of billions of dollars” over several years and warning the measure could reduce annual income-tax revenue by up to $1 billion if wealthy residents left. At least seven billionaires — including Steven Spielberg, Larry Page, Sergey Brin, Travis Kalanick and Peter Thiel — have already left California, according to reporting cited by Reason, and a contested Stanford-linked analysis published by the National Bureau of Economic Research found that in 85 percent of its 100,000 simulations the tax ultimately cost the state more than it raised. The California Medical Association also opposed it: its president, René Bravo, said the measure “relies on an unstable revenue source, provides no clear accountability for how the money would be spent, and does not offer the long-term funding solution that patients and health care professionals need.”
Source: Reason, Nov. 9, 2026 (LAO analysis; NBER working paper by Jaros and Rauh; CMA statement)
An October survey by UC Berkeley's Institute of Governmental Studies found 50 percent of likely voters opposed and 42 percent in favour — opposition up from 48 percent in August — and a separate October poll by the Public Policy Institute of California found 52 percent opposed to 46 percent in favour. The final margin, about 52.8 to 47.2, landed almost exactly where the last PPIC poll had it.
The rival measures that could have erased it anyway
Proposition 40 faced a second threat beyond the No vote itself. Two competing measures on the same ballot, Propositions 41 and 42, were designed to restrict California's power to impose wealth taxes, and under the ballot's conflict rule either one passing with more votes than Proposition 40 would have nullified it even in victory. Proposition 42, which prohibits new state taxes on personal property and bars a wealth tax, was ahead by 51.6 percent to 48.3 percent at about the same point in the count but had not been called — meaning voters appear to have not only rejected this tax but moved to ban the concept itself.
Source: Vantage, Nov. 10, 2026; Reason, Nov. 9, 2026
What this means, and what happens next
For California's large Punjabi and immigrant communities — from the Central Valley trucking corridors to the Bay Area — the practical stake in this fight was Medi-Cal, the programme the tax was written to fund, which covers healthcare for millions of low-income Californians. That funding question now returns to Sacramento unresolved, with no new revenue source approved. The vote count continues until the Secretary of State certifies the result on December 11, but the AP call is not expected to change: the margin is about 620,000 votes. The fight itself may not be over — the AP reported that backers have said they could put a similar tax back on the ballot in 2028 — and the Proposition 42 count will decide whether a future wealth tax is even legally possible in California.
Source: Associated Press via TechCrunch, Nov. 9, 2026; Vantage, Nov. 10, 2026
What is solid
- The Associated Press called Proposition 40 defeated on Monday, November 9, with about 52.8 percent voting no and 47.2 percent yes; the Secretary of State's Monday-night tally stood at 5,789,026 no to 5,159,356 yes, unofficial until certification on Dec. 11.
- The measure was a one-time 5 percent tax on residents worth over $1 billion who lived in California on Jan. 1, 2026, with 90 percent of revenue earmarked for Medi-Cal.
- Governor Gavin Newsom opposed it; SEIU-United Healthcare Workers West sponsored it; Bernie Sanders, Ro Khanna and the California Democratic Party backed it.
What is only claimed
- Revenue estimates were never agreed: backers projected about $100 billion over five years, the Legislative Analyst's Office projected only 'tens of billions' and warned of up to $1 billion a year in lost income-tax revenue, and a contested NBER analysis argued the tax could lose the state money overall.
- Campaign-money totals differ by method: about $130 million raised by committees opposing the tax (filings cited by Reason) versus a $378.4 million total opposition-spending tally (CalMatters via Vantage) that counts the wider multi-measure campaign.