Tech billionaires dodge massive wealth tax as California voters decisively reject controversial Proposition

Californians have voted down Proposition 40, a first-of-its-kind levy on billionaire wealth, after a bitter and expensive campaign in which some of the country's best-known technology figures spent heavily to keep their taxes from rising.The result is a victory for the Democratic politicians who lined up against the measure, among them Gov. Gavin Newsom, who is weighing a presidential run in 2028. Opponents of the tax argued it would drive the state's richest residents to move away. The campaign against the proposition raised about 10 times what supporters did.Sergey Brin, who co-founded Google, put more than $100 million of his own money into a political action committee fighting the measure. The tax would have been a one-time 5% charge on the wealth of Californians with a net worth above $1 billion. Most of the revenue was earmarked to replace federal healthcare funding cuts, with 10% set aside for education and food-assistance programs.California voters have rejected a tax on the net worth of billionaires following a contentious and expensive ballot fight (AFP/Getty)SEIU United Healthcare Workers West, which supported the proposition, said it was needed to cover an estimated $100 billion in federal healthcare money the state is set to lose over five years. Proposition 40 was the nation's biggest test yet of an idea progressives have championed for years: taxing the ultra-rich on the main way they build their fortunes, their investments, rather than the wages they earn from working.Liberal figures from outside California backed it, including Vermont Sen. Bernie Sanders, who spent the campaign's final weeks touring cities across the state to press voters to approve it. Billionaires poured millions into Building a Better California, a political action committee working to defeat the measure.The committee, which also supported other ballot measures designed to nullify the tax, raised more than $333 million, with nearly a third of that coming from Brin.Brin and Larry Page, his fellow Google co-founder, were among the billionaires who began cutting ties with California in anticipation of the possible tax.Mark Zuckerberg, another tech mogul, said he would stay in the state for eight years and struck a deal with Meta to help him pay the tax without giving up his ownership stake in the company. Some traditional Democratic allies, among them Planned Parenthood and the California Medical Association, joined the coalition opposing the proposition.President Donald Trump takes a question from a reporter as he speaks alongside Mark Zuckerberg, CEO of Meta Platforms, Elon Musk, CEO of Tesla and SpaceX, Jensen Huang, CEO of Nvidia, Speaker of the House Mike Johnson (R-LA) and others holds a press briefing with AI executives following a meeting on artificial intelligence outside the West Wing of the White House on September 29 (Getty)They worried about how the revenue would be divided and about the strain on the state's budget if wealthy taxpayers left en masse. California's budget depends heavily on income tax paid by its richest residents. “Proposition 40 was a reckless experiment conducted on our state’s economy with little regard for the harms it would cause,” the coalition said in a statement.Robert Swonger, an auto glass technician living near Sacramento who's politically independent, said before voting concluded Nov. 3 that he planned to vote against it. “Obviously, I would like billionaires not to have as much money as they do,” he said. “But I don’t believe taxing them out of existence is going to work.” Progressive politicians, among them Sanders and Massachusetts Sen. Elizabeth Warren, have long backed a federal wealth tax.Newsom argues a California version would put the state at a disadvantage, though he supports a national minimum tax on anyone whose net worth exceeds $100 million. Days before Sanders held his California rallies last month, Newsom told reporters that the senator's focus on wealth inequality was “spot-on.” But he said, “On this issue, we fundamentally disagree.”Backers of the California tax have recently begun running ads in New Hampshire, New Mexico and Virginia, states that vote early in the 2028 Democratic presidential primary, attacking Newsom for his opposition to the measure.