SACRAMENTO — California voters rejected Proposition 40, a ballot initiative that would have levied a one-time 5 percent tax on the state's billionaires. The Associated Press called the measure's failure late Monday.
The defeat came despite a push by healthcare workers who gathered over 1.5 million signatures to place the Billionaire Tax on the ballot. Mayra Castaneda, an ultrasound technologist, helped lead the signature-collection effort.
Opponents spent nearly $400 million to defeat the measure, including money on competing ballot initiatives, making it one of the costliest ballot initiative campaigns in U.S. history.
Economist Gabriel Zucman of UC Berkeley, who supports wealth taxes, attributed the loss to the spending gap. "The money spent by the billionaires was critical," Zucman said. He noted that opponents spent more than $300 million on advertising while supporters spent negligible sums, leaving California voters "carpet-bombed by a deluge of ads" and "exposed only to the anti-tax arguments" through television and mail.
Zucman pointed to the Texas Senate race, where billionaire Elon Musk poured over $150 million into defeating Democrat James Talarico, who won anyway by a comfortable margin. "The net difference in spending was considerably larger for Prop 40," Zucman said, underscoring the scale of the financial imbalance.
Economist Joshua Rauh of Stanford, a critic of Prop 40, offered a different interpretation of the results. The debate between the two economists reflects a broader divide within the Democratic Party over whether to champion a wealth tax in future presidential primaries.
