California voters rejected Proposition 40, a one-time 5% tax on the wealth of the state's billionaires, by 55.6% to 44.4%, according to California Secretary of State statewide returns posted at 8:08 a.m. Nov. 4 with every precinct reporting. That count is not final: California keeps counting mail ballots for weeks after election day.
What the tax would have done
The Legislative Analyst's Office summarized a yes vote this way: the state "would collect a one-time tax from billionaires equal to 5 percent of their wealth." CalMatters reported the tax would have reached roughly 200 billionaires and that its backers, led by SEIU-UHW, projected $100 billion over five years for health care and education. The LAO estimated tens of billions of dollars over several years.
Who paid to stop it
Billionaire opponents and business interests spent $316.7 million against Prop 40 and for the companion measures, Props 41 and 42, CalMatters reported. Sergey Brin, the Google co-founder, gave $102 million to Building a Better California, a committee he founded, CalMatters reported. By BTP's math, that is 32.2% of the $316.7 million. The committee's own filings on Cal-Access were not checked for this story.
About $92 million went to TV ads on Prop 40, mostly on the No side, Politico reported Oct. 28, citing AdImpact. Politico also named Peter Thiel among the opponents and reported that Sen. Bernie Sanders and Rep. Ro Khanna backed the Yes side. A Citrin-POLITICO poll put support at 46% before the vote.
The cancel-out measure
Gov. Gavin Newsom opposed Prop 40 while proposing a national billionaire tax, Politico reported, and backed Prop 42. Prop 42, which bans new state personal property taxes and certain retroactive state taxes, passed with 54.3% in the same Secretary of State returns. Prop 41, which would have restricted new state taxes, was failing with 47.6% yes.
When the people a tax targets can outspend it, the ballot belongs to them.