California's Billionaire Tax Too Early to Call as Votes Counted

California's Proposition 40 — a one-time 5% tax on residents worth more than $1 billion — was too early to call Wednesday morning, with almost 6 million votes still uncounted and the AP Decision Team waiting for more results before declaring a winner.

The measure would impose the levy on Californians whose net worth exceeds $1 billion, with most of the revenue dedicated to replacing federal funding cuts to healthcare. It triggered one of the most expensive ballot fights in state history and split the Democratic Party's national leadership.

Vermont Sen. Bernie Sanders framed the proposal as a monumental step toward reining in wealth inequality by ensuring the ultra-rich pay their fair share. Democratic Gov. Gavin Newsom warned it would push the state's wealthiest residents to move out and take their tax money with them.

Where do the votes stand?

Opponents outnumbered supporters across most of the state in early returns:

• "No" held sizable leads in the Inland/Central Valley region and the San Diego and Orange County area.
• "No" had smaller leads along the central coast and in the Bay Area.
• "Yes" led narrowly in Los Angeles County and on the northern coast.

The geographic split tells the story: the tech-heavy Bay Area, home to many of the measure's targets, leaned against it.

How much money fought the measure?

The "no" side raised roughly 10 times as much as the "yes" side, driven largely by tech moguls and venture capitalists who poured millions into an opposing political action committee.

Some billionaires moved preemptively. Google co-founders Sergey Brin and Larry Page started cutting ties with the state in anticipation of the tax. Mark Zuckerberg said he would stay in California for eight years and struck a deal with Meta that would help him pay the tax without losing his ownership stake in the company.

The counteroffensive didn't stop at opposing Prop 40. The PAC Building a Better California raised more than $333 million — about 30% of it from Brin — to back Propositions 41 and 42, two measures designed to nullify the wealth tax. They include a ban on new taxes on financial assets and other personal property, a category that excludes real estate. Even if Proposition 40 wins a majority, it would be blocked from taking effect if either Prop 41 or 42 passes and receives more "yes" votes.

Who backed the tax — and who didn't?

Supporters, led by the labor union SEIU United Healthcare Workers West, said the state needs the revenue to backfill federal healthcare cuts. The union estimates California will lose $100 billion in federal healthcare funding over five years.

"It's time to collect those taxes so we can ensure that our healthcare system is still safe," said Lorena Gonzalez, president of the California Federation of Labor Unions.

But some traditional Democratic allies broke ranks. Planned Parenthood and the California Teachers Association joined the opposition coalition, citing concerns about how the revenue would be divided and the potential budget hit from a mass exodus of wealthy taxpayers. California's budget depends heavily on the income tax paid by its richest residents.

Voters reflected that ambivalence. Robert Swonger, a politically independent auto glass technician living near Sacramento, planned to vote no: "Obviously, I would like billionaires not to have as much money as they do. But I don't believe taxing them out of existence is going to work."

Anthony Serrano, a Democrat from Folsom who works for Kaiser Permanente, one of the nation's largest not-for-profit healthcare plans, leaned yes because he tends to support "anything that is a positive for healthcare."

What happens next?

The wealth-tax fight won't end at California's border. Progressive politicians including Sanders and Massachusetts Sen. Elizabeth Warren have long backed a federal wealth tax. Newsom opposes a state-level levy, arguing it would disadvantage California, but supports a national minimum tax on anyone with a net worth above $100 million.

Days before Sanders held rallies in California cities last month, Newsom told reporters the senator's focus on wealth inequality was "spot-on" — but added that "on this issue, we fundamentally disagree."

Even if the billionaire tax fails, the fight changed the conversation, Gonzalez said. "We are taking a step forward, and we are showing other states that you can look them in the eye — you can look these billionaires in the eye — and take them on," she said.

Between the uncounted ballots and the $333 million insurance policy of Props 41 and 42, California's billionaires have at least two paths to avoiding the 5% levy.