California billionaire tax defeated: US media projection

California voters have rejected a one-time tax on billionaires, US media projected on Monday, despite growing anger over global wealth disparity.

The tax would have forced about 200 billionaires in the state to cough up 5 percent of their total net worth, with the money largely dedicated to helping pay for healthcare.

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

US Senator Bernie Sanders, front, attends a rally related to a proposal to tax billionaires in Los Angeles on Oct. 5.

Photo: Reuters

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 US 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.

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

“Significant changes rarely move in a straight line,” Nobel Prize-winning economist Joseph E. Stiglitz said in a statement by the International Capital Tax Commission before Monday’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 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 cofounder 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 California 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.