California Rejects Billionaire Wealth Tax
Voters turned down Proposition 40, a one-time 5% levy on the wealth of billionaires, in the November midterm elections.
Updated on Nov. 4, 2026 in Elections
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California voters rejected Proposition 40, a one-time 5% tax on billionaires' wealth, in the November 3 midterm elections. With more than half of ballots counted, 56% of voters opposed the measure.
Why it matters
The proposal was intended to offset expected losses from federal budget cuts, which could cost California up to 100 billion dollars over five years. Its defeat leaves the state without that revenue source as it faces those cuts.
With more than half of ballots counted, 56% of California voters rejected the proposed one-time 5% levy on billionaire wealth, which targeted an estimated 200 to 250 individuals. The final certified tally had not been reported at the time of publication.
The players
Gabriel Zucman
Economist who backed Proposition 40 and is known for research on wealth inequality and taxation of the rich.
Emmanuel Saez
Economist who supported Proposition 40 and is known for research on income and wealth concentration, teaching at the University of California, Berkeley.
The details
Proposition 40 would have imposed a retroactive, one-time 5% levy on billionaire wealth, payable over five years and projected to raise about 100 billion dollars, mostly for health care with some going to education and food banks. Supporters, including a major health union and economists Gabriel Zucman and Emmanuel Saez, argued it would offset federal cuts, while opponents warned billionaires would leave the state and that the tax would later be expanded.
Timeline
November 3, 2026: Midterm elections held, including the vote on Proposition 40.
November 4, 2026: More than half of ballots counted, showing 56% opposition.
Over five years: Proposed payment period for the billionaire tax if it had passed.
Political Context
Proposition 40 was pitched as a direct answer to Donald Trump's federal budget law, which could cost California up to 100 billion dollars over five years. Opponents countered that the tax would drive billionaires out of the state and erode the tax base.
Because Proposition 40 failed, the proposed levy will not apply to billionaire wealth in California. State budget planning will need to account for federal cuts without the revenue this measure would have generated.
The takeaway
The defeat of Proposition 40 shows how strongly voters weigh tax policy against concerns about capital flight. Readers following state budget debates should watch how California responds to the federal cuts it now faces without this revenue.
Further reading
For broader context on how voters are weighing ballot measures, see more Elections coverage.
Source note: This article includes information reported by RTE.
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