California's Proposition 40 Billionaire Tax Trails in Early Returns, Too Close to Call

California's Proposition 40, a one-time 5% tax on the assets of billionaires, was trailing in vote counts on Wednesday after the midterm election, though the race had not been formally called. About 56% of voters (55.6% in one count) had rejected the measure and about 44% supported it, with roughly 6 million votes still to be counted. The measure, proposed by the state's powerful healthcare union, would have mostly funded healthcare. It would have applied to assets such as businesses, securities, art, collectibles and intellectual property, excluding select pensions, real estate and retirement accounts, and would have applied retroactively to billionaires who were California residents on Jan. 1. California-based tech billionaires spent hundreds of millions of dollars to defeat it, making it one of the costliest ballot fights in state history. Gov. Gavin Newsom opposed it. Economist Gabriel Zucman, a backer, conceded Wednesday and said he would pursue a national version through Congress, noting that Rep. Ro Khanna and Sen. Bernie Sanders have introduced one.

The Los Angeles Times, on the left, leads with why the measure underperformed despite a national Democratic wave, casting it as a David-versus-Goliath fight and quoting USC's Dan Schnur, who said sponsors may have been too ambitious. It stresses healthcare funding and Trump-era cuts. The right-leaning Washington Free Beacon reads the results as showing Democratic wins reflect gas prices and anti-Trump sentiment rather than enthusiasm for taxing the rich, mocks the "one time" label, quotes Zucman's national plans and flags constitutional obstacles. Fox News emphasizes the Democratic Socialists of America's backing, Newsom's break with them, and an Advancing American Freedom scholar's warning about capital flight. Both sides report the same vote split and the tech opposition, but differ on whether the result shows voter limits or intraparty conflict. Semafor, the alternative outlet, offers a distinct angle: the vote as a referendum on California's tech industry and AI wealth.