California voters have rejected a proposal to impose a one-time tax on billionaires, delivering a major setback to progressive Democrats who supported the measure.
According to NBC News, Proposition 40 would have introduced a five percent tax on assets belonging to California residents worth more than $1.1 billion.
The proposal also included a smaller, phased-in tax for people worth between $1 billion and $1.1 billion, with 90 percent of the revenue earmarked for healthcare.
The tax would have applied retroactively to billionaires living in California on January 1, 2026.
Supporters, including Senator Bernie Sanders and Democratic Representative Ro Khanna, argued that the measure would help fund essential public services.
However, the proposal divided Democrats, with outgoing Governor Gavin Newsom and Governor-elect Xavier Becerra opposing it.
Critics warned that higher taxes could drive wealthy residents out of California, potentially reducing state revenue.
The campaign also faced strong opposition from Silicon Valley billionaires and business groups.
According to advertising tracker AdImpact, opponents were outspending supporters by 250 to one on political advertisements in late October.
Several major unions and advocacy organisations also opposed the measure.
