California voters reject proposed one-time billionaire tax

The tax would have applied retroactively to anyone living in California on January 1, 2026. Supporters, largely labor unions, said the state’s little more than 200 billionaires held about $2 trillion in combined wealth and argued the levy could raise as much as $100 billion over five years for healthcare and education.

Opponents warned that wealthy residents might leave California, weakening the state’s economy and tax base. Nic Carter, a Florida-based general partner at crypto-focused Castle Island Ventures, called the proposal a “sword of Damocles hanging” over founders and said it could discourage venture capital investment if entrepreneurs had to sell company shares to pay the tax. California entrepreneur Jesse Tinsely also argued it would make it harder for founders to build companies while retaining control.

Emmanuel Saez, a UC Berkeley economics professor who helped develop the measure with fellow Berkeley economist Gabriel Zucman, disputed that concern. He said the tax could reduce economic ownership without taking away voting control, which can be preserved through structures such as dual-class shares. Saez also said California collects about $3 billion a year from billionaires, roughly 1% of state revenue brought in between 2025 and 2026.

The campaign was heavily financed by opponents. The AP reported that the “no” side raised roughly 10 times as much as supporters, including as much as $379 million from billionaires such as Google co-founder Sergey Brin for a media campaign against the measure. Backers said they could return with a similar proposal in 2028.