,regionOfInterest=(672,264)&hash=5e06445bc439d6257a14d67a45f95d9087cafe3e39965b21c25d229a71483d0f "California voters defeated Proposition 40 on November 3, 2026, rejecting a one-time 5% tax on")
California voters defeated Proposition 40 on November 3, 2026, rejecting a one-time 5% tax on billionaire wealth by 55.2% to 44.7% in preliminary results, with about 61.4% of expected ballots counted. The measure would have applied to roughly 200 people based on residency as of January 1, 2026, and its backers had promised roughly $100 billion in revenue for health care.
But the tax was already losing ground before the vote: a study published in October 2026 found that seven California billionaires had left the state or taken steps to move their residency, holding a combined fortune of about $540 billion — nearly 30% of the billionaire wealth the measure was designed to tax, focus.de reported.
How the November 3 Vote Unfolded
The initiative was championed by economists Gabriel Zucman and Emmanuel Saez, longtime advocates for heavier taxation of large fortunes, and by Senator Bernie Sanders, who has campaigned against the existence of billionaires. Supporters argued the one-time levy would generate about $100 billion for the state’s health care system.
With 55.2% voting against and 44.7% in favor, the measure failed even in a state known as a stronghold of the American left.
The Billionaires Who Left Before the Ballots Were Counted
The most prominent departure came earlier: Elon Musk moved from California to Texas in 2020. Among the seven billionaires identified in the study were Google co-founders Larry Page and Sergey Brin and investor Peter Thiel.
Economists Benjamin Jaros and Joshua Rauh, whose study was published in October 2026, calculated that the seven had a combined net worth of roughly $540 billion.
What the Tax Would Have Actually Raised
Accounting for the departures and likely legal challenges, Jaros and Rauh estimated the tax would have brought in only $28 billion to $36 billion — a mean of about $30 billion — instead of the projected $100 billion.
California’s billionaires collectively pay between $3.3 billion and $5.8 billion a year in state income taxes, the economists estimated, and the departures could cost the state between $1 billion and $3.5 billion a year in lost income tax revenue. Assuming those losses persist, the researchers calculated a negative fiscal present value of $38.9 billion, and in 85% of their simulations the net balance for the state would have been negative.
Why Leaving California Is Easier Than Leaving Europe
California already has one of the highest state income tax rates in the country, with a top rate of 13.3% on top of federal taxes. Texas and Florida levy no state income tax at all, and unlike in Europe there is no language barrier for wealthy Americans relocating between states.
In France, the number of emigrants earning over €300,000 a year rose 46% in 2013 after a 75% top tax rate was announced. In Norway, 515 people with assets above 10 million kroner left in 2022 and 2023 after the wealth tax rose to as much as 1.1% — more than double the previous pace. Britain projected a net loss of 16,500 millionaires for 2025 after ending tax privileges for wealthy foreign residents, up from 10,800 the year before.
Questions Readers Are Asking
How many billionaires actually left California?
Seven, according to the October 2026 study by Jaros and Rauh, with a combined fortune of about $540 billion.
How much would Proposition 40 have raised?
Between $28 billion and $36 billion once departures and legal fights were factored in, versus the $100 billion backers promised.
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