California voters approve Prop. 42, reject wealth tax on billionaires

California voters approved Proposition 42 with just over 51% support, according to the Associated Press, which called the race with about 96% of ballots counted. The measure bans new taxes on personal property such as 401(k) accounts, business interests, digital assets, intellectual property, and personal belongings, while excluding real estate. It also prevents retroactive taxation except during a state-declared emergency.

The result also defeated Proposition 40, a proposed one-time tax on billionaires' assets. Prop. 42, a "poison pill" designed to nullify Prop. 40 if both passed, was backed by Building a Better California, a group funded by Google co-founder Sergey Brin and other tech executives.

Susan Shelley of the Howard Jarvis Association, which opposed the tax, said voters worried about taxation of retirement savings. Wealth-tax advocates may try again in 2028, but overturning Prop. 42 would be required first.