California voters have rejected a one-time wealth tax on billionaires.
A ballot measure that proposed the tax on 200 to 250 extra-rich state residents failed, 53% to 47%.
The Associated Press confirmed the result nearly a week after Election Day.
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A tax on people worth over $1 billion seemed like an easy lift in California. But Democratic Gov. Gavin Newsom said a national wealth tax would be better, so billionaires would not flee the state.
The incoming governor, Xavier Becerra, also opposed the ballot measure, known as Proposition 40.
While those Democrats still want wealthier Californians to pay what they call “their fair share” of taxes, a wall of outright opponents said the wealth tax would hurt the state economy.
Tech leaders, notably Google co-founder Sergey Brin, poured millions into opposition ads.
“Voters in every part of the state joined Governor Newsom, Planned Parenthood, doctors, teachers, business and labor leaders, firefighters, and so many others to oppose a measure that would have caused irreversible harm to California’s economy, tax base, and budget,” said Building a Better California, a coalition that opposed the ballot measure, in a statement.
The Service Employees International Union-United Healthcare Workers West drove support for the levy, calling it necessary to restore fairness and fund health programs.
The union told California media outlets that it would try again in 2028 if the state Legislature can’t find a way to backfill federal cuts to healthcare funding.
Rep. Ro Khanna, California Democrat, supported the tax and criticized Mr. Newsom, saying the governor didn’t want to cross the billionaires “bankrolling his campaigns.”
Sen. Bernard Sanders, Vermont independent, made an October push to bolster support for the tax.
But it wasn’t enough to get the idea across the finish line. The tax divided liberals, with some saying it wasn’t a sustainable revenue source.
Outside studies said the tax would be self-defeating because billionaires would move out of California, eroding the future tax base.
Building a Better California said Prop 40 would have hurt California’s economy and “put at risk the revenue that funds education, healthcare, public safety, and all the other essential services Californians rely on.”
The coalition added, “It was a lose-lose for California, and voters clearly agreed.”
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