Voters rejected California’s so-called “billionaires’ tax” ballot initiative, according to a projection from The Associated Press on Monday.
This means that the state will not levy a 5% tax on the wealth of California taxpayers and trusts with assets valued over $1 billion. This measure is known as Proposition 40.
The tax was introduced in response to steep cuts to California’s healthcare funding that resulted from the passage of President Donald Trump’s “Big Beautiful Bill.” Yes on 40, the main group backing the measure, had said the tax would generate around $100 billion over five years. The measure would have affected roughly 200 of California’s billionaires.
Building a Better California, the main group opposing the tax, raised $333.1 million since the beginning of the year. Most of that money came from billionaires.
Sergey Brin, co-founder of Google, is the organization’s top donor. He gave $102 million to Building a Better California. Because of Brin, “co-founder” is the occupation that gave the most to the group overall, a total of $105.3 million. Donors who listed their occupation as “Investor/Philanthropist” gave the group $47.7 million. CEOs gave $46.6 million. People who listed their occupation as “chairman” contributed $43 million.
Naturally, many of the major donors reported being based in California. $43.9 million came from donors in San Rafael, California, a city in the San Francisco Bay Area. $40.2 million came from West Hollywood. $34.7 million came from Redwood City, another Bay Area city, and $28.4 million came from San Francisco itself.
Signs sit on chairs ahead of a rally in support of Proposition 40 and in opposition to Propositions 41 and 42, related to a proposal to tax billionaires, ahead of the midterm elections in Los Angeles, Oct. 5, 2026.
Mike Blake/Reuters
The largest share of contributions, however, came from Sergey Brin, in Reno, Nevada.
Gov. Gavin Newsom became its most prominent opponent, arguing that the tax could be dodged by billionaires who could leave the state for another. As ABC News has reported, Newsom has shared a counterproposal: a national billionaire tax focused on loans taken against assets.
Sen. Bernie Sanders and Rep. Ro Khanna were huge proponents of the measure, arguing that it could set the stage and be an example for a national wealth tax.
Khanna told ABC News in early October that he and Newsom are “polar opposites” on the issue. Both have openly discussed that they are weighing a presidential bid in 2028.
“He [Newsom] doesn’t want to offend some of the billionaires who he wants to finance his campaigns, and that’s the question: Are we going to be a party for the working class? Are we going to be beholden to our donors?” Khanna said.
Tech investors pushed back hard on the measure. Vinod Khosla warned that the state’s top wealth creators would leave, and Mark Cuban told Khanna he doesn’t understand business.
