California voters have rejected a proposed tax on the state's billionaires, after some of Silicon Valley's wealthiest executives and investors spent $378.4 million to defeat the measure—a victory for a coalition led by Google cofounder Sergey Brin.

The Associated Press called the race on Monday, with 52.8% of voters opposing Proposition 40 and 47.2% supporting it. The "yes" votes needed for passage had trailed for days. Even against opposition spending that outpaced their fundraising by more than 10 to 1, supporters still drew the backing of nearly half of voters.

According to CalMatters, ultrawealthy opponents collectively contributed $378.4 million to campaigns against the tax and related countermeasures such as Propositions 41 and 42—more than 10 times the $33.5 million raised by supporters of Proposition 40. The defeat means, at least for now, the end of an effort to make California the first state to impose a one-time tax on its billionaires, and it marks a significant win for the Silicon Valley executives who came together to block the measure.

A measure that split the Democratic Party

Proposition 40 would have imposed a one-time 5% tax on the net worth of individuals worth more than $1 billion who were California residents on Jan. 1, 2026. The proposed tax covered financial assets and other forms of wealth, rather than just income. That structure set the proposal apart from conventional taxation, which applies to income earned in a given year rather than to net worth accumulated over time.

Under the proposal, approximately 90% of the revenue would have gone toward healthcare services, with the remaining 10% allocated to education and food assistance. The Legislative Analyst's Office estimated that the measure could generate "tens of billions" of dollars.

The initiative was introduced by Service Employees International Union-United Healthcare Workers West, which argued that California needed additional revenue to address healthcare funding shortfalls following federal spending reductions under President Donald Trump's tax and spending legislation. The measure also drew support from Vermont Sen. Bernie Sanders, U.S. Rep. Ro Khanna, the California Democratic Party, and several labor organizations.

But not every Democrat—and not every Californian—was on the same page. The proposal faced opposition from prominent Democrats including Gov. Gavin Newsom, who argued that a state-level wealth tax would push wealthy residents and their businesses out of the state, and said he would instead support a national wealth tax. San Francisco Democrats also opposed the measure, voting 17-4 against Proposition 40 in August, while U.S. Rep. Nancy Pelosi, a member of the local party, voted "no endorsement."

"Here is what I support: A national billionaires' tax," Newsom wrote in a June post on Substack. "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."

The billionaire opposition campaign

The campaign against the proposition was financed by some of the most prominent figures in the tech, finance, and investment industries, with Brin emerging as its largest individual financial backer. Brin contributed approximately $102 million to Building a Better California, a political committee he established in January that became the main vehicle opposing the wealth tax—making him one of the most consequential financial players in California's 2026 ballot-measure fight. He relocated to Nevada in December 2025, a move that made his fortune, estimated at $231 billion by Bloomberg, potentially exempt from the tax.

Eric Schmidt, Google's former CEO, was also a major contributor to the opposition effort, giving $40.2 million according to campaign finance filings in the California Secretary of State's Cal-ACCESS database. Other prominent tech executives and investors contributed millions as well, including DoorDash CEO Tony Xu, Stripe cofounder Patrick Collison, venture capitalist John Doerr, cryptocurrency entrepreneur Chris Larsen, and former Sequoia Capital partner Michael Moritz.

The wealth tax would have been killed anyway

The spending was not limited to Building a Better California's fight against Proposition 40. Through Oct. 20, the committee had spent more than $304 million supporting efforts to defeat Proposition 40 and advance Propositions 41 and 42—direct counters to the wealth tax. Of that amount, approximately $118.5 million went toward opposing Proposition 40, while the other $186 million supported Propositions 41 and 42, according to Capital & Main.

Proposition 41 would "require preelection audits for initiatives proposing special taxes and additional audits every four years. It also would prohibit new tax revenue from being exempted from state spending limits," making it harder for the state to use funds raised by the billionaire tax. Proposition 42 would "prohibit taxes on personal savings, assets and retirement holdings," outlawing retroactive taxation and directly countering Proposition 40. According to the Legislative Analyst's Office, if either measure received more "yes" votes than Proposition 40, the wealth tax could be stopped even if it were approved.

According to the AP, Proposition 41 did not pass while Proposition 42 did—meaning Proposition 40 would have been shot down even if voters had approved it. Proposition 42's approval now writes that prohibition into state law, so any future attempt to tax wealth in California would face a legal hurdle that did not exist before this election.

According to Politico, more than 70 current and former California billionaires spent a record $612 million on the state's elections this cycle. Of that money, at least 30 billionaires contributed more than $293 million specifically to the wealth tax fight.

This story was originally featured on Fortune.com.