California faces one-two punch as voters reject wealth tax and billionaires eye exits

California voters rejected a proposed one-time 5% tax on billionaire wealth, turning back a measure supporters said could raise tens of billions of dollars for healthcare. The tax would have applied to people who were California residents on Jan. 1, 2026, with payments spread over five years.

The defeat came as some of the state's wealthiest residents warned they could leave California over the proposal. The state has one of the nation's largest billionaire populations and relies heavily on high earners to fund its budget, making the potential loss of additional wealthy residents a concern for state finances.