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Archive photo · 20 March 2024California Voters Reject Proposition 40 Billionaire Wealth Tax
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California voters rejected Prop. 40 by 52.8% to 47.2%. Billionaires spent about $378 million to defeat the measure.
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10 outlets in this story. Read their headlines below.
Prop 40 defeated
California voters rejected Proposition 40, a one-time 5% wealth tax on residents with net worth over $1 billion, in a vote that left progressive advocates facing a setback in the state’s Democratic politics.
“Voters in California have rejected a measure to impose a one-time 5% wealth tax on residents with net worth over $1 billion.”
Newsom “won the argument on California’s proposed wealth tax,” while Newsom argued he would vote against the measure because a single-state effort would only drive billionaires to other states and harm California’s budget.
Proposition 42 was leading with 51.6% of the vote as of Nov. 10, with about 83% of ballots counted, and Proposition 42 bars new state taxes on personal property and blocks most taxes from being applied retroactively.
Voters rejected Proposition 40 by 52.8% to 47.2%, and Proposition 42 was leading Monday evening by 51.6% to 48.4%.
NPR’s Planet Money said opponents of Prop 40 spent almost $400 million fighting it, and it quoted UC Berkeley’s Gabriel Zucman saying, “The money spent by the billionaires was critical.”
Newsom, Khanna, and spending
Rep. Ro Khanna said, “The reason we didn’t win is because of Newsom,” and he accused Newsom of aligning with “Republican donors, Trump donors” instead of the California Democratic Party and the California labor movement.
Newsom’s team declined to respond to Khanna, while it quoted Khanna’s accusation that Newsom did not want to “offend the billionaire donors whose money he wants to get … for running a campaign.”
Building a Better California, a political committee largely funded by Google co-founder Sergey Brin, gave it $102 million, and the committee put more than $300 million into defeating Proposition 40.
Billionaires poured hundreds of millions into the campaign to stop Prop. 40, and it said Google co-founder Sergey Brin donated $102 million to Building a Better California.
NPR’s Planet Money quoted Stanford’s Joshua Rauh saying, “The electorate even in progressive California has shown that it isn’t ready for a wealth tax,” as it described a debate over whether advertising or skepticism drove the outcome.
What comes next
SEIU-United Healthcare Workers West leaders framed the defeat as a prompt to return to the ballot in 2028, and CalMatters reported that union leaders vowed to try again in 2028 if California’s Legislature “fails to deliver a real solution” to fund healthcare hammered by recent federal law.
CNN said advocates estimated the wealth tax could have raised $100 billion, enough to cover a shortfall of about $20 billion per year for California moving forward, and it said the funding threatened Medi-Cal.
Proposition 42 “permanently protects pensions, 401(k)s, IRAs and other personal savings from new taxes,” and it quoted Brian R. Marvel, president of the Peace Officers Research Association of California, who donated $150,000 to the Yes on 42 campaign.
Proposition 42 could get in the way of SEIU-UHW’s future plans to try taxing wealth again, and it said the billionaire tax would have generated $100 billion for healthcare and education through a one-time, 5% tax on billionaires.
The Guardian reported that Silicon Valley’s elite raised nearly $425m to sink the tax, and it quoted Suzanne Jimenez saying, “Billionaire-funded propaganda may mislead voters about the consequences of these cuts today” as hospitals reduce services and emergency rooms close.
