California billionaires won a contentious ballot measure campaign, defeating a proposed one-time tax on their wealth.
The bruising campaign over Proposition 40 was the most expensive in state history and witness to back-and-forth dealing from tech billionaires and democratic leaders, including Gavin Newsom, the governor, who steadfastly opposed the measure. While supporters of Prop 40 cast it as a solution to drastic healthcare cuts from Trump’s One Big Beautiful Bill Act, opponents led by prosperous billionaires mounted an influential campaign saying the billionaire tax was instead “an everyone tax”.
This result could hamper nationwide momentum on demands that billionaires pay their fair share and states enacting new laws to tax the ultra-wealthy.
Prop 40 proposed a one-time 5% tax on all individuals in California with a net worth of more than $1bn as of 1 January 2026. It was sponsored by the healthcare union SEIU-United Healthcare Workers West, and dictated that the proceeds from the tax would fund healthcare programs, along with some education and food assistance.
The state’s major unions, and progressive politicians such as Bernie Sanders, the Vermont senator, and Ro Khanna, a California congressman, backed Prop 40. But both the Democratic and Republican candidates for governor, as well as organizations such as Planned Parenthood Affiliates of California, a lobbying branch of the healthcare group, opposed it – pointing to its structure as a one-off tax that would only fund certain healthcare programs. Prop 40’s most vocal critics, however, were the state’s billionaires.
Donors to the opposition campaign were a who’s who of Silicon Valley, including executives from Google, Palantir, DoorDash, Stripe and Reddit, along with several prominent venture capitalists. The biggest donor, by far, was Sergey Brin, a Google co-founder, who contributed at least $132m to fight the tax, according to campaign finance filings.
All told, the billionaires mounted a nearly $425m battle against Prop 40, making it the most expensive opposition campaign in state history. In the first two weeks of October, spending surpassed $2.5m a day, according to the most recentcampaign finance filings.
Part of the opposition campaign’s strategy was mounting two separate counter-measures on the ballot, Proposition 41 and 42. Prop 41 directly targeted the billionaire tax, while Prop 42 was a general proposal on limiting certain new taxes and would ban any taxation on billionaire wealth. If either measure received more yes votes than Prop 40, they would stop the billionaire tax from taking effect – even if it passed.
Supporters of the billionaire tax called Props 41 and 42 “poison pills”.
