California Voters Reject World's First Billionaire Wealth Tax

California voters have rejected Proposition 40, a ballot measure that would have imposed a one-time 5% tax on residents worth more than $1.1bn (£800m). Counting took nearly a week after the midterm election before a projection on the measure could be made.

The proposal targeted total wealth, including assets such as shares as well as income. Roughly 200 billionaires live in the state, among them Meta's Mark Zuckerberg, reality television star Kim Kardashian and media mogul Oprah Winfrey.

Had it passed, experts believe it would have been the world's first wealth tax aimed specifically at billionaires.

What would the tax have paid for?

The measure was designed to raise about $100bn. Backers wanted the money to make up for federal funding cuts to healthcare in California. Those cuts resulted from President Donald Trump's sweeping tax and spending bill.

Supporters argued the tax would ensure the ultra-wealthy contributed their fair share and helped backfill gaps in the state's budget.

California, home to some 23 million registered voters, has the largest economy in the country and the fourth largest globally. It hosts one of the highest concentrations of billionaires in the world — and one of the widest wealth gaps.

Who fought the measure?

Opposition came from Google co-founder Sergey Brin, California Governor Gavin Newsom and several labour unions.

Newsom, whose tenure as governor is ending, said he worried the measure would push wealthy residents out of the state and drain their crucial income tax revenue.

Some billionaire critics spent millions trying to defeat it. A handful moved out of California to evade the possible tax. Brin gave more than $100m to a political organisation funding ballot measures that could block the tax, according to the Los Angeles Times.

The measure also faced structural obstacles. Two other propositions on the same ballot would have effectively reversed it, even if it had passed. It failed amid divisions among Democrats and labour unions.

What did the union say?

Dave Regan, president of Service Employees International Union-United Healthcare Workers West, led the campaign for the measure. On election night he said the billionaires' efforts to block the tax created "a lot of confusion and a lot of second-guessing among people who really in their hearts know what the right the thing to do is".

Regan pledged to seek a billionaire tax once more in 2028, meaning the fight over taxing California's wealthiest residents will return to the ballot in the next presidential cycle.