California voters have rejected a proposed billionaire tax that would have imposed a one-off levy of 5% on most of the wealth of the state’s richest residents.
Supporters of Proposition 40 said the measure could have raised $100 billion for healthcare, arguing that wealthy Californians should help fill a funding gap after healthcare programmes were cut by the Republican-controlled Congress.
The campaign was led by SEIU-UHW, a union representing healthcare workers. California is estimated to have more than 200 billionaires, although some estimates put the figure at several hundred.
Opponents said the California billionaire tax would encourage wealthy residents to leave the state, reducing revenue and damaging the wider economy.
The proposal exposed divisions among Democrats in a state where the party heavily outnumbers Republicans. The California Democratic Party backed Proposition 40, along with Democratic congressman Ro Khanna and Vermont senator Bernie Sanders, who travelled to the state to campaign for it.
But Democratic governor Gavin Newsom opposed the measure, saying a national tax on wealthy Americans would be preferable. Xavier Becerra, the Democratic candidate for governor, also rejected the proposal.
A major teachers’ union opposed Proposition 40, saying only a small share of the potential revenue would have been allocated to schools. Sergey Brin, the Google co-founder, joined other wealthy Californians in funding the campaign against it.
At least five times more money was spent opposing the measure than supporting it. Mr Brin also backed campaigns for two further ballot proposals intended to prevent the billionaire tax from taking effect if voters had approved it.
