California’s ballot fight over wealth and political muscle began with an ambitious promise: a one-time 5% tax on residents worth more than $1 billion, with most proceeds intended to replace healthcare funding lost to federal cuts. SEIU-United Healthcare Workers West placed Proposition 40 on the ballot after collecting 874,641 signatures, backed by labor allies, the state Democratic Party, Rep. Ro Khanna and Sen. Bernie Sanders.¹

But the measure entered Election Day under heavy pressure. Opponents, led by a PAC funded by Google co-founder Sergey Brin and other wealthy executives, argued the tax could push entrepreneurs and companies from California. Their allied Proposition 42 proposed a permanent bar on new state taxes on personal property and retroactive taxes—the two features central to Prop 40.²

The anti-tax side also found a potent pocketbook argument. Prop 42’s supporters said it would protect savings and retirement accounts from double taxation; critics called it “just another billionaire-funded trick.” Tax analysts warned that voters who favored taxing billionaires could still back the broader prohibition to protect their own assets.³

By Tuesday night, Prop 40 trailed 57% to 43%, while Prop 42 led at about 55%. Prop 41, another competing measure that could have complicated the tax’s spending mechanism, was behind. Even if Prop 40 were to pass, California’s rule for conflicting ballot measures meant a higher-vote total for a rival initiative could neutralize it.¹

Supporters blamed more than the nearly $400 million opposition campaign. Robert Dempsey of Our Revolution said the broader anti-tax pitch landed because “People have had enough; they can’t afford to live in this state.”⁴ Campaign manager Igor Vosky said the deeper failure was organizational: “winning requires coalitions.”⁴

That diagnosis reflected a visibly divided Democratic establishment. Gov. Gavin Newsom, gubernatorial candidate Xavier Becerra, the California Teachers Association and Planned Parenthood of California opposed the measure or withheld support, while some labor organizations backed it and SEIU California remained neutral. As votes continued to be counted, Prop 40’s narrow path depended on whether outstanding ballots proved more economically progressive than the votes already tallied—a possibility analysts considered unlikely.⁵