California voters rejected Proposition 40 on November 9, 2026, a one-time 5% wealth tax on residents with a net worth exceeding $1 billion, after opposition from Gov. Gavin Newsom and several tech billionaires. The defeat means the projected $100 billion in revenue over five years will not be collected and the tax will not be applied retroactively to those residing in the state on January 1, 2026.
The loss underscores the political limits of implementing large-scale wealth taxes in high‑income states, signaling to other jurisdictions that similar measures may face strong resistance. It also preserves California's appeal to high‑net‑worth individuals, reducing the risk of capital flight that opponents warned could harm the state's long‑term economic growth.