California Billionaire Tax Trails as Union Vows to Return
Proposition 40 would impose a one-time 5% tax on the net worth of California residents whose wealth exceeded $1 billion. The measure’s sponsor, the California healthcare workers’ union SEIU-UHW, said it would help offset expected federal healthcare funding cuts. It proposed directing 90% of revenue to healthcare, with the remainder for education, food assistance and administration.
The measure was trailing by Wednesday afternoon, with roughly 60% of ballots counted. Backers had estimated it could raise about $100 billion over five years; the Legislative Analyst’s Office projected tens of billions. The tax would apply to people who met the wealth threshold and were California residents on January 1, 2026, with payment due in 2027 and the option to pay over five years at a higher cost.
The campaign became part of a nearly $400 million fight over three connected ballot measures. Sergey Brin contributed more than $100 million to a group opposing Proposition 40 and supporting competing measures. Opponents argued the tax could damage public services and the state economy. Gov. Gavin Newsom also opposed it, warning that wealthy residents might leave California. Supporters, including Sen. Bernie Sanders, argued billionaires should contribute more to public services.
SEIU-UHW president Dave Regan’s union spent heavily on the effort: its committee backing Proposition 40 reported $37.3 million in expenses through October 17. A separate union-backed measure, Proposition 44, was rejected by 82% of voters; its committee reported $11.1 million in expenses. SEIU-UHW chief of staff Suzanne Jimenez said the union could return with a billionaire tax in 2028 if state leaders fail to protect patients and find another solution.
Billionaire Spending Helps Sink California’s Wealth Tax
California’s proposed one-time tax on billionaires was losing as ballots were counted Wednesday, after opponents poured hundreds of millions of dollars into a campaign against it. Proposition 40 had 44.4% support and 55.6% opposition, with about 60% of votes counted. Its defeat would leave supporters looking toward another ballot fight, not abandon their argument that the wealthiest Californians should help fund essential services.
The measure would have charged a 5% levy on Californians worth more than $1 billion, with 90% of the proceeds designated for healthcare. Its backers said the revenue could help blunt anticipated federal healthcare cuts. SEIU-UHW chief of staff Suzanne Jimenez said the union could return to voters in 2028 if Sacramento did not protect patients and deliver another solution.
The campaign’s imbalance in resources was stark. Sergey Brin contributed more than $100 million to an opposition group, while the committee supporting Proposition 40 reported $37.3 million in spending through October 17. Opponents warned the tax could harm the economy and public services; Gov. Gavin Newsom argued wealthy residents might leave the state. Those concerns helped divide Democrats, even as Sen. Bernie Sanders supported the measure.
The union also backed Proposition 44, which voters rejected by 82%. Its committee reported $11.1 million in spending. The results leave healthcare funding and the effects of federal cuts at the center of the debate, while SEIU-UHW keeps open the possibility of another tax proposal.
California Voters Reject Costly Billionaire Tax Campaign
California voters were rejecting Proposition 40 as ballots were counted, delivering a clear warning against a sweeping state tax on wealth. The measure would have imposed a one-time 5% levy on residents worth more than $1 billion. Its backers said it could raise tens of billions of dollars, but opponents warned the plan could weaken the economy, damage public services and encourage wealthy residents to move away.
The campaign consumed substantial resources. SEIU-UHW’s committee supporting Proposition 40 reported $37.3 million in expenditures through October 17, while Sergey Brin contributed more than $100 million to an opposition group. The broader battle over three connected ballot measures involved nearly $400 million in spending. The union’s separate Proposition 44 campaign also failed: 82% of voters rejected the measure, and its committee reported $11.1 million in expenses.
Gov. Gavin Newsom opposed the billionaire tax, warning that wealthy Californians might leave the state. That concern highlights a weakness of trying to impose a state-level wealth tax: residents can relocate, while the state risks losing income tax revenue. Proposition 40 would have applied based on residency on January 1, 2026, and required payment beginning in 2027, with an installment option that cost more.
SEIU-UHW says it could return with another tax proposal in 2028 if lawmakers do not provide a solution to protect patients. But the election results show that promises to fund healthcare do not erase voters’ concerns about the tax’s reach and potential consequences. The proposal’s defeat is a setback for state-level wealth-tax advocates.
Reported by Newsweek, New York Post, Los Angeles Times, The Washington Examiner.
