Voters Didn't Kill California's Billionaire Tax. $378 Million Did.

Ultra-wealthy opponents gave $378.4 million to stop Prop. 40, more than 11 times what the health care union behind it raised.

Californians didn't reject the billionaire tax. Billionaires outspent it. Proposition 40 lost 52.8% to 47.2%, and I don't read that as a verdict on whether the richest people in the state should pay more. I read it as a receipt.

Ultra-wealthy opponents gave $378.4 million to stop the one-time 5% tax on billionaires' net worth, CalMatters reported after The Associated Press called the race Monday. That total includes money for two countermeasures, Propositions 41 and 42. The union that wrote the tax, Service Employees International Union-United Healthcare Workers West, raised $33.5 million. Divide one by the other and the no side had more than $11 for every $1 on the yes side. That's what it costs to beat a ballot measure in California now.

The state's own books back that up. Through Oct. 22, committees formed only to fight Prop. 40 had reported $130.3 million in contributions, almost four times the $33.4 million on the yes side, according to the Secretary of State. One of those committees reported $118.7 million by itself.

Google co-founder Sergey Brin gave $102 million to Building a Better California, the committee he founded to oppose the tax, and he publicly moved out of state, CalMatters reported. The committee also passed other billionaires' money through to the fight.

Now look at what voters said they believed. In a UC Berkeley Citrin-POLITICO poll just before the election, more voters wanted billionaires taxed harder to pay for public services than wanted them kept here for their jobs and tax revenue, yet fewer than half backed Prop. 40, CalMatters reported. The idea held. The measure got squeezed.

Prop. 42 shows how the squeezing worked. It bans new wealth taxes, and its ads and mailers sold it as protection for pensions and retirement accounts, CalMatters reported, with $159 million from billionaires behind it. The Legislative Analyst's Office says in its analysis that Prop. 40 generally would have left pensions and retirement accounts alone. Prop. 42 was ahead Monday evening, 51.6% to 48.4%.

The money got help from Democrats. Gov. Gavin Newsom tried behind closed doors to keep the tax off the ballot, then endorsed Prop. 42. The California Teachers Association and Planned Parenthood of California lined up against the tax. The state Democratic Party and the California Federation of Labor Unions backed it.

"People these days are very tribal. When your tribe is arguing, people start to listen to the counterarguments," John Matsusaka, a USC economist who studies direct democracy, told CalMatters before the election. Cash doesn't change minds on bedrock questions like abortion, he said, though it can work on voters who aren't sure. Democrats created the doubt. Billionaires paid to spread it.

Maybe voters really did fear the rich would leave, and I wrote on Oct. 4 that a few might. The analysts had already priced that. The LAO said billionaires leaving or shifting their income probably would cost the state less than $1 billion a year, against tens of billions from the tax. And the tax reached back to billionaires who lived here on Jan. 1, so the people who left had already been counted.

The losers are easy to name. Ninety percent of the money had to go to health care, the LAO says, with the rest for schools, food aid and running the tax. Backers of the tax pointed to federal health care cuts expected to cost 2 million Californians their coverage, CalMatters reported. Even the No on 40 campaign said Monday that the state still faces "enormous pressure" to pay for health care hurt by those cuts.

Don't count on Sacramento to fill the hole. Progressive bills to tax assets have tried a handful of times since 2020, and none has gotten out of committee, CalMatters reported. Gov.-elect Xavier Becerra opposed this tax, though he's said he'd consider others.

Abby Lunardini, a spokesperson for Building a Better California, called the tax "a lose-lose for California" in a statement and said voters agreed. Dave Regan, the union's president, says they'll try again in 2028 if lawmakers don't come up with the money. "That's not a hypothetical. That's our plan," he told CalMatters. If Prop. 42 holds its lead, that plan runs straight into a wealth-tax ban that billionaires put $159 million behind. Voters can undo it, but only with another ballot measure, and you've just seen what one costs.

Source: CalMatters, retrieved November 10, 2026. Other sources: State of California, CalMatters (2), State of California (2).