California voters rejected a proposal backed by socialist Senator Bernie Sanders that would have imposed a wealth tax on billionaires’ net worth, dealing a rare blow to the Left in the Golden State.
The Associated Press called the race Monday night. The results showed 53% voting against the wealth tax (known as Proposition 40) while 47% supported it. Had it passed, all billionaires in the state would have been subject to a one-time 5% tax on their net worth, and the money would have been funneled primarily to government health care programs.
Proposition 40 was proposed and pushed by the Service Employees International Union – United Healthcare Workers West, a group that represents about 120,000 health care workers in California.
“The state would decide how and when to spend the money from the wealth tax, but it would have to be spent on certain types of services,” California’s Legislative Analyst’s Office found. “Ninety percent of the money would have to be spent on health care services for the public. The rest would have to be spent on education, food assistance, and administration of the wealth tax.”
The outcome is a major loss for Sanders and a host of far-Left organizations that supported the measure. Two potential Democrat presidential candidates, Rep. Ro Khanna (D-CA) and Senator Chris Murphy (D-CT), also backed the proposal.
Governor Gavin Newsom, another Democrat eyeing the White House, opposed Proposition 40, arguing that the money that would have been taken in by the state through the measure should have been spread out to fund education, abortion facilities, and housing instead of mostly health care.
Newsom said that he wanted Congress to pass a wealth tax so billionaires cannot move states to avoid punitive taxes.
“So here is what I support: A national billionaires’ tax. A true minimum tax on billionaires — a modern Buffett Rule — that ensures the people at the very top pay at least the tax rate their own workers pay,” he said.
The measure was opposed by officials like Rep. Kevin Kiley, a Republican who recently changed his affiliation to independent, who argued it would drive business out of the state.
“California’s proposed wealth tax is an unprecedented attempt to chase down people who have already left as a result of the state’s poor policies,” he said. “As a result, many of our state’s leading job creators are leaving preemptively. No state should be allowed to reach back in time and impose a new tax on someone who no longer lives there. That is fundamentally unfair.”
Longshot gubernatorial candidate Steve Hilton, who lost to former Biden official Xavier Becerra on Election Day, also opposed the wealth tax, arguing it would destroy the state’s economy.
Leftist advocates had hoped the passage of a wealth tax would pave the way for similar taxes across the country.
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