California voters defeat billionaire tax proposal that divided Democrats
California voters rejected Prop 40, a one-time 5% wealth tax on billionaires, ending a proposal that split Democrats over whether the measure would fund healthcare or drive the wealthy away. Proponents, led by SEIU-UHW, argued the wealthy should help restore healthcare funding cut by Congress, potentially raising about $100 billion for healthcare, while opponents warned it would harm the state’s economy and revenue. The measure highlighted intra-party tensions, with key Democratic figures like Gov. Gavin Newsom and Xavier Becerra opposing it despite party support. A surge of campaign spending, led by Sergey Brin and others, leaned against the proposal and helped place limits on its effect. The outcome sets the stage for national tax debates and limits on wealth-based levies in California.
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Prop 40 proposed a one-time 5% tax on most of a billionaire's wealth, with proponents asserting it could raise about $100 billion for healthcare programs.
Support came from the state Democratic Party, Rep. Ro Khanna, and Sen. Bernie Sanders, while Gov. Gavin Newsom and gubernatorial candidate Xavier Becerra opposed the measure.
A leading teachers union also opposed Prop 40, and Sergey Brin led a large fundraising push against it that helped finance other anti-billionaire measures on the ballot.
Opposition argued the tax would drive the wealthy out of California, reducing state revenue and harming the economy, while supporters cited federal budget constraints on healthcare.
Campaign spending opposing Prop 40 was at least five times higher than supporting it, reflecting deep partisan and ideological divides within the state's electorate.
Brin’s involvement correlated with a broader effort to place additional ballot proposals aimed at blocking the billionaire tax, if voters had approved Prop 40.
The defeat signals momentum stalled after an early surge for the tax proposal and hints at broader political and policy debates about wealth taxes at both state and national levels.