California Voters Reject 5% Billionaire Tax

California's richest landowners can put their checkbooks away. Voters rejected Proposition 40, which would have charged residents worth over $1 billion a one-time tax of 5% of their net worth, with the Associated Press calling the race Monday night, Yahoo Finance reported ^[1].

Roughly 53% of voters said no and 47% said yes, according to AP figures cited by Yahoo Finance ^[3].

How we got here

• The tax was estimated to reach about 200 billionaires in the state ^[1].
• The state's billionaires poured a record $612 million into 2026 California races, close to half aimed at sinking Prop 40, per Politico figures cited by Yahoo Finance ^[3].
• Marcus & Millichap chair George Marcus gave $2 million to the opposition committee; at his $1.5 billion net worth he would have owed $75 million ^[2].
• Stewart Resnick, whose family owns large tracts of California land, put $4.5 million into the campaign ^[2].

But the measure itself spared real property. Real estate and some retirement accounts were excluded from the asset base, Yahoo Finance noted ^[3]. The union behind the tax has signaled it could try again, and Rep. Ro Khanna said he would back a future version ^[1]. Voters also made permanent higher income tax rates starting at $250,000 through Proposition 3 ^[1].

What it means for you

For investors in California's luxury markets, the defeat removes one reason for the ultrawealthy to leave. Several high-profile billionaires had already relocated as the proposal took shape, Yahoo Finance reported ^[3]. By our math, a billionaire with $2 billion of company stock would have owed $100 million, a bill that could have forced asset sales. Prop 42, which would bar taxes on personal assets, was still uncalled on Tuesday ^[1].

Zoom out

In Los Angeles County, 55% of votes favored the tax, while Orange County voted 59% against it, according to The Real Deal ^[2]. Voters nationwide backed some taxes on high earners while rejecting a tax on wealth itself ^[1].