United States, California rejects referendum on tax on billionaires

California voters rejected Proposition 40 (known as the Billionaire Tax Act), rejecting the introduction of a wealth tax on large fortunes in the referendum held on November 3. This was reported by the projections released last night by the American broadcasters CNN and CBS News.

The proposal, supported among others by the economist Gabriel Zucman, did not obtain a majority of support. The measure provided for a one-off levy equal to 5% of the net worth of the approximately 200 billionaires resident in the state, the most populous in the United States. The estimated revenue, close to $100 billion, was intended to primarily fund California's public health and social services.

The no front

The promoters of the initiative aimed to correct fiscal inequalities by making large wealth holders contribute more to protect the state healthcare system. Opponents, however, argued that the tax would cause a flight of capital and entrepreneurs to other American states, reducing income tax revenues and investments in the long term.

It is, therefore, a landslide victory for the tech giants, obtained thanks to an unprecedented financial mobilization that exceeded 379 million dollars. Among the main financiers, Sergey Brin, co-founder of Google, stood out, having paid more than 100 million dollars to the "Building a Better California" committee, followed by former Google CEO Eric Schmidt with 42 million. Together with them, 27 other billionaires have deployed their economic power to also finance legal countermeasures aimed at neutralizing the tax. Even Democratic governor Gavin Newsom opposed it, fearing the flight of billionaires and their future taxes.