California voters have rejected Proposition 40, a proposed one-time tax on billionaires, the Associated Press reported on Monday. The measure, which would have levied a 5% tax on state residents with a net worth over $1 billion, failed after an expensive campaign.
The tax was intended to fund public programs, notably Medi-Cal, the state's Medicaid program. Proponents, largely labor unions, argued it would generate significant revenue from a small number of wealthy residents, projecting up to $100 billion over five years for public healthcare and education.
However, opponents, including Governor Gavin Newsom and some tech figures, argued the tax could lead to wealthy residents leaving the state and discourage economic growth. Nic Carter, a general partner at Castle Island Ventures, suggested such taxes would benefit fiscally conservative states like Florida and Texas.
The "no" campaign reportedly raised approximately 10 times more than the "yes" side, with significant spending from billionaires like Google co-founder Sergey Brin. Despite the rejection, supporters of the measure have indicated that the fight is not over.