California voters have officially torpedoed a controversial, would-be historic wealth tax on billionaires.
Proposition 40 –– a measure that would have imposed a first-in-the-nation one time 5% tax on billionaires –– was rejected by Californians by 52.8% to 47.2% when the race was called by the Associated Press on Monday.
While the proposal was rejected in most counties across the Golden State, traditionally blue counties like Los Angeles and San Francisco saw many residents coming out in support of the bill.
San Francisco County and Los Angeles County saw 56.2% and 55% of its voters, respectively, in favor of Prop 40.
On the other hand, Orange County and San Diego County overwhelmingly voted “No” with 59.3% and 54.3%, respectively.
Millions of dollars were poured into opposing the proposal, including major spending from Google co-founder Sergey Brin, former Google CEO Eric Schmidt and Palantir co-founder Peter Thiel.
Brin spent nearly $102 million into a political organization called Building a Better California which spent hundreds of millions of dollars to defeat Prop 40, according to Forbes.
Had the billionaire tax passed, it would have generated around $100 billion for healthcare and education, according to Service Employees International Union-United Healthcare Workers West (SEIU-UHW).
California Governor Gavin Newsom was also skeptical about the proposition, warning that it would drive out the state’s wealthiest residents and tech founders.
Instead, he backed Proposition 42 which prohibits a wealth tax like Prop 40 and bans any new taxes on personal property.
“Proposition 40 risked California’s economic competitiveness and fiscal stability, as well as the revenue we rely on to fund our top priorities — from education and healthcare to public safety and infrastructure,” a group that opposed the measure told the LA Times.
Despite a majority of Californians rejected the wealth tax, SEIU-UHW leaders vowed to put another billionaire tax for the 2028 elections if healthcare problems are not addressed.
