California voters were leaning against a proposed one-time tax on billionaires, with Proposition 40 trailing as election officials continued counting ballots. As of Wednesday afternoon, the measure had received 44.4 percent of the vote, compared with 55.6 percent opposed, with approximately 60 percent of votes counted. Even as Proposition 40 appeared headed for defeat, its backers were already looking ahead to another fight.
The Service Employees International Union-United Healthcare Workers West (SEIU-UHW), which sponsored the measure, told Newsweek that it could return to the ballot in 2028. The first-of-its-kind wealth tax would impose a one-time levy of 5 percent on Californians whose net worth exceeds $1 billion. The proposal has divided prominent Democrats and drawn fierce opposition from California's wealthy tech sector.
Google co-founder Sergey Brin has poured $102 million into Building a Better California, a political spending group leading the effort to defeat Proposition 40 and advance two competing ballot measures, Propositions 41 and 42. A spokesperson for Building a Better California said the coalition opposing Proposition 40 reflects concerns about its potential impact on the state's public services and economy. The measure was sponsored by SEIU-UHW, which argued that the tax would help California offset anticipated federal healthcare funding cuts and protect services for residents.
The proposal became one of the most contentious measures on California's 2026 ballot, dividing Democrats and drawing significant opposition from business groups, technology executives and some traditional Democratic allies. Supporters, including independent Vermont U.S. Senator Bernie Sanders, argued that the wealthiest Californians should contribute more to help fund public services, calling Prop 40 the "most important ballot measure in America." Democratic Governor Gavin Newsom opposed the proposal, warning that taxing billionaires at the state level could encourage wealthy residents to leave California.
Unlike an annual wealth tax, Proposition 40 would impose a one-time levy on an individual's net worth, including financial assets such as stocks, bonds and other interests in property, according to the text of the proposed amendment. The tax would be due in 2027, with taxpayers allowed to spread payments over five years, although doing so would require them to pay more, according to the Legislative Analyst's Office (LAO). Supporters have estimated the tax could generate approximately $100 billion over five years, although estimates vary.
The LAO estimates the measure could generate tens of billions of dollars in revenue. If some billionaires leave California, the state could lose less than $1 billion annually in income tax revenue. Under the proposal, 90 percent of the revenue would go toward healthcare services, while the remaining 10 percent would fund education, food assistance and administration of the tax.
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