By Lester Black
SFGate, San Francisco
(TNS)
California’s groundbreaking attempt to tax the net worth of some of the world’s wealthiest people was trailing Wednesday morning, as early election results showed Proposition 40 losing by hundreds of thousands of votes.
The Secretary of State reported 55.6% of voters opposed to the measure as of 8 a.m. Wednesday, with 99% of precincts partially reporting results. California’s counties are notoriously slow at counting ballots and it will likely take days before the statewide measure is called.
Proposition 40’s supporters were already striking a conciliatory message Tuesday night even before vote totals had been counted. Rep. Ro Khanna, who represents parts of Silicon Valley, promised that he would fight for another wealth tax in 2028 if the proposition fails.
“I’m proud of our efforts wherever we end up,” Khanna said in a Tuesday night press conference. “I am going to be right there, first in line supporting this in the next election cycle if it doesn’t pass this one.”
Recommended Articles
Taxes November 4, 2026
California Billionaire Tax Trailing in Early Returns
Widely known as the billionaire tax, Prop. 40 would force California’s estimated 250 billionaires to pay a one-time, 5% tax of their net worth. A labor union organized the measure as a way to fund healthcare after Republicans in Congress cut billions of dollars in Medicaid for California.
The measure quickly became one of the most closely watched ballot initiatives of the 2026 midterms. Billionaires like Google co-founder Sergey Brin panicked and launched a record-breaking fundraising effort to defeat the tax. Brin, who is worth over $200 billion, donated $102 million to a PAC organized to fight the wealth tax. If the measure fails, that nine-figure investment will still be a good deal for Brin, as his potential tax bill would be over $10 billion if he was subject to the proposed tax.
Khanna said Tuesday night that the billionaire-backed opposition campaign lied about how the tax was structured, and said people will die from a lack of health care if the tax fails.
“Kids will die, working class folks will die so billionaires can have an extra month and a half of net worth, even though their net worth has gone up,” Khanna said Tuesday night. “You wonder why Eric Schmidt is getting booed at commencement speeches he’s given. These folks are the new economic royalists of our time.”
If it passed, Prop. 40 would be one of the first modern taxes on net worth, rather than a tax on income. Billionaires generally pay a very small share of their net worth in taxes—Jeff Bezos and Elon Musk have managed to pay zero income tax some years—because of how their wealth is tied to ownership of companies.
The tax’s unprecedented nature made it a test for how progressives could tackle tax reform in an era with record inequality. Progressive leaders like Sen. Bernie Sanders campaigned in California to help pass the tax.
Billionaires were equally energized to block the measure, dropping record amounts of money to oppose Proposition 40 as well as sponsoring two other measures, Propositions 41 and 42, designed to kill billionaire tax. Prop. 42 was earning a majority of votes Tuesday night with 54.5% of voters supporting the measure.
Polls showed Democratic voters largely supporting the measure, but Prop. 40 divided the state’s Democratic party leadership. U.S. Rep. Nancy Pelosi avoided endorsing either side of the measure, and Gov. Gavin Newsom and Gov.-elect Xavier Becerra opposed the tax. Some labor unions also opposed the measure, calling it poorly formed policy because it would erode the state’s tax base when billionaires flee the tax.
Khanna said Tuesday night that if Prop. 40 fails, discontent against the ultrawealthy is already apparent, pointing to Democrats seizing control of Congress on Tuesday night.
“The game is up. People have had it,” Khanna said. “This election is just the beginning of ushering in a New Deal. So they’re on the losing end.”
Photo caption: Rep. Ro Khanna of California and Sen. Bernie Sanders both support a billionaire tax in California, which is currently losing by hundreds of thousands of votes. (Ro Khanna/Facebook)
_______
© 2026 SFGate, San Francisco. Visit www.sfgate.com. Distributed by Tribune Content Agency LLC.
Sign in to get access to this free resource, and all of our whitepapers and reports.
Download this content today!
Register Now Already registered? Click here to Log In
