California Voters Reject Billionaire Wealth Tax

California voters rejected Proposition 40, a proposed one-time 5% tax on billionaires’ assets that supporters said could raise roughly $100 billion for health care and other programs amid anticipated federal funding cuts. The defeat was a setback for progressives who viewed the tax as a potential model elsewhere; opponents, including Gov. Gavin Newsom, warned it could drive wealthy residents away and weaken the state’s tax base. The campaign exposed divisions among Democrats and drew heavy opposition spending, including from wealthy tech investors, while support was strongest in Los Angeles and San Francisco. The sponsoring union said it may pursue another wealth-tax effort in 2028, and a separate measure seeking to restrict future wealth taxes was leading. Voters also rejected Proposition 45, which would have streamlined environmental reviews for housing and clean-energy projects, preserving existing review and legal challenge processes as supporters pledged to continue seeking permitting reforms.