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With half the votes counted, Proposition 40, the California billionaire tax, was down nearly 15 points statewide. In San Francisco, voters were almost evenly split on the measure.
Propositions 41 and 42 were designed to nullify the billionaire tax. Prop. 41, which would invalidate new taxes whose revenues are excluded from the state spending limit, was behind by about 5 points. Prop. 42, which would prohibit new state personal property taxes and certain retroactive state taxes, was ahead by almost 9 points.
If Prop. 40 gets more votes than Prop. 41 and Prop. 42, the billionaire tax will survive. But it will fail if either 41 or 42 gets more votes.
Proposition 40 has been widely seen as a referendum on voters’ feelings about wealth inequality. It would levy a one-time, 5 percent tax on California billionaires who lived in the state as of Jan. 1, 2026—about 200 people. Most of the revenue from the tax would go toward the state’s healthcare program, which faces a $30 billion budget deficit due to federal budget cuts, with remaining funds going to education and food assistance.
A California labor union representing healthcare workers — Service Employees International Union-United Healthcare Workers West — placed Prop. 40 on the ballot. Among its most high-profile progressive endorsers were U.S. Representative Ro Khanna and Senator Bernie Sanders, who called the wealth tax “the most important ballot initiative in the country” at a rally last month. Some billionaires, including philanthropist Tom Steyer and Nvidia CEO Jensen Huang, spoke out in favor of the tax.
Other public figures, including Gov. Gavin Newsom, his successor, Xavier Becerra, and San Francisco Mayor Daniel Lurie have opposed the tax, saying it would encourage wealthy individuals to leave California. The San Francisco Democratic Party agreed, and defied the state party to oppose the measure.
Prop. 40 broke records for spending on a California measure. The billlionaire-funded political action committee Building a Better California spent over $304 million against Prop. 40, and devised and helped fund the two competing measures. Google co-founder Sergey Brin — whose net worth is reportedly $228 billion — put over $100 million against Prop. 40, and San Francisco billionaire and political donor Chris Larsen gave $12.5 million to stop the wealth tax.
The collective effort to pass Prop. 40 stalled in recent days. Last week, as Election Day approached, 230 campaign staffers with the union behind the measure went on strike, effectively stopping work on the union’s Prop. 40 campaign.
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