California rejects 5pc billionaire tax that would have raised US$100b, US media projects

A voter points to her ‘I Voted’ sticker after voting at a polling location on Election Day at Boyle Heights City Hall in Los Angeles, California November 3, 2026. California voters have rejected a one-time tax on billionaires, US media projected yesterday, despite growing anger over global wealth disparity. — AFP pic

First Published: Tuesday, 10 Nov 2026 3:05 PM MYT

LOS ANGELES, Nov 10 — California voters have rejected a one-time tax on billionaires, US media projected yesterday, despite growing anger over global wealth disparity.

The tax would have forced around 200 billionaires in the state to cough up five per cent of their total net worth, with the money largely dedicated to helping pay for healthcare.

CNN and CBS News both projected that so-called Proposition 40 would not pass, nearly a week after voters cast ballots on whether to tax the billionaires.

With the highest population of any US state, California is notoriously slow at counting votes.

Prop 40 was one of a bevy of proposals put to voters in last week’s midterm elections, which delivered large-scale victories across the nation for the Democratic Party, and handed a drubbing to President Donald Trump’s Republicans.

The proposal was unveiled to fanfare in California, a state that would be the world’s fourth largest economy if it were a country, but one in which there is a yawning gulf between the haves and the have-nots.

It was seen by wealth tax proponents as a key part of a global effort to tackle growing income inequality.

But the tax already appeared to be headed for defeat last week, with about 60 per cent of votes counted on Wednesday showing that “No” was leading by 55.6 per cent to 44.4 per cent.

Push wealthy to leave 

“Significant changes rarely move in a straight line,” Nobel Prize-winning economist Joseph E. Stiglitz said in a statement sent to AFP by the International Capital Tax Commission before yesterday’s projections.

“Prop 40 put a tax on billionaire wealth on the ballot in the United States for the first time,” he added.

Advocates calculated the one-off tax would raise about US$100 billion (RM405 billion) which would be used to fund a public healthcare system that has been hit by Trump’s budget cuts.

Opponents of the ballot measure, including Google co-founder Sergey Brin, raised hundreds of millions of dollars to defeat the idea, arguing it would push the wealthy to leave California.

“No” campaign commercials warning about the loss of future tax revenues if billionaires desert the state played wall-to-wall across TV stations in California in the run-up to the vote.

Outgoing Governor Gavin Newsom, who is widely expected to make a run for the White House in 2028, had said he would vote no.

California has previously voted three times this decade on a wealth tax, rejecting it every time. — AFP