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Californians have voted down a proposal for a one-off levy on the state’s billionaires, according to projections by US broadcasters on Monday.
Proposition 40 would have required around 200 of the state’s richest residents to hand over 5% of their total net worth. Most of the money would have gone towards healthcare.
CNN and CBS News both called the result almost a week after polling day. California has the largest population of any US state and is known for counting votes slowly.
The measure had already looked set to fail. With roughly 60% of ballots counted on Wednesday, the “No” side was ahead by 55.6% to 44.4%.
Prop 40 was one of many questions on the ballot in last week’s midterm elections. Those elections brought sweeping gains for the Democrats across the country and heavy losses for President Donald Trump’s Republicans.
Supporters of wealth taxes saw the vote as an important test for a global campaign against widening inequality. If California were a country, it would be the world’s fourth-largest economy, but the gap between its richest and poorest residents is vast.
Campaigners estimated the tax would raise about $100 billion. That money would have gone to the state’s public healthcare system, which has been squeezed by Trump’s budget cuts.
Fears of a billionaire exodus
Opponents spent hundreds of millions of dollars fighting the measure, among them Google co-founder Sergey Brin. They argued it would drive the super-rich out of California.
In the run-up to the vote, “No” campaign adverts filled the state’s TV channels. They warned that California would lose future tax revenue if its billionaires moved elsewhere.
Gavin Newsom, the outgoing governor, had said he would vote against it. Newsom is widely expected to run for the White House in 2028.
Joseph Stiglitz, the Nobel Prize-winning economist, sent a statement to AFP through the International Capital Tax Commission before the projections came out. “Significant changes rarely move in a straight line,” he said.
Stiglitz added: “Prop 40 put a tax on billionaire wealth on the ballot in the United States for the first time.”
California has voted on a wealth tax three times before this decade and turned it down each time.
Additional sources • AFP