California’s proposed ‘billionaire tax’ fails to pass

California voters have rejected Proposition 40, a proposed one-off wealth tax on billionaires, after a costly campaign that set labour unions against some of the state’s wealthiest technology figures. The result matters because the measure aimed to raise substantial funding for public services, while opponents warned it could drive wealthy residents and investment away.

The proposal would have imposed a retroactive 5% tax on California residents worth more than $1 billion as of 1 January 2026. Supporters said the state’s roughly 200 billionaires, with about $2 trillion in combined wealth, could generate as much as $100 billion over five years for healthcare and education; critics argued founders might have to sell company shares and that capital could leave the state. Governor Gavin Newsom also opposed the measure.