California voters reject one-time 5% wealth tax on billionaires — France 24

Voters in California, United States, rejected Proposition 40, an initiative to introduce a one-time 5% tax on the wealth of state residents with a net worth exceeding $1 billion. As France 24 reports, the Associated Press determined on Monday that there were already enough votes against the proposal for it to be defeated.

The vote became one of the biggest tests in the United States of the idea of taxing the wealth of ultra-rich people, which progressive politicians have long supported. Supporters of the initiative planned to direct most of the revenue toward offsetting cuts in federal healthcare funding, and 10% toward education and food assistance programs.

Campaign against the tax raised significantly more money

The SEIU United Healthcare Workers West union, which supported the tax, said it was needed to offset approximately $100 billion that California, by its estimate, would lose due to cuts in federal medical funding over five years.

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At the same time, opponents of Proposition 40 argued that adopting the tax could encourage the wealthiest taxpayers to leave the state. The campaign against the initiative raised approximately ten times more money than its supporters. The Building a Better California committee, which worked to defeat the proposal and supported other initiatives to repeal the tax, raised more than $333 million. Nearly a third of that amount was provided by Google co-founder Sergey Brin, who spent more than $100 million fighting the tax.

Support depended on age and income

According to the AP Voter Poll, a majority of California voters under the age of 30 supported Proposition 40. Among voters aged 65 and older, about seven in ten voted against it. The initiative was supported by approximately half of respondents with an annual household income below $100,000, while nearly six in ten voters with incomes of $100,000 or more opposed it.

California Governor Gavin Newsom, Planned Parenthood, and the California Medical Association also spoke out against the tax. They were concerned about the distribution of tax revenue, as well as the potential effect of wealthy residents leaving on the state budget, which depends heavily on income tax paid by the wealthiest residents.