Daijiworld Media Network - California

California, Nov 10: A proposed billionaire tax backed by US Senator Bernie Sanders and other progressive leaders has been defeated in California, dealing a setback to the Democratic Party's left wing and a campaign to use wealth taxation as a model for the rest of the country.

Proponents of Proposition 40 had estimated that the measure could generate $100 billion in revenue, with most of the money earmarked for healthcare programmes to offset federal funding cuts introduced to help finance tax breaks under President Donald Trump's 'One Big Beautiful Bill'.

The tax proposal targeted stocks, bonds and business assets rather than earned income. Supporters argued that it had a strong chance of passing in California, where registered Democrats outnumber Republicans by nearly two to one.

However, California Governor Gavin Newsom, who is widely viewed as a potential contender for the Democratic presidential nomination in 2028, opposed the measure. He warned that it could ultimately harm the state by creating an unfavourable environment for technology entrepreneurs and other business owners.

Newsom's opposition, along with divisions among Democratic leaders, weakened support for the proposal ahead of the vote.

Opponents argued that the tax would encourage wealthy individuals to leave California, taking their income-tax contributions and businesses with them. They also warned that it could discourage entrepreneurs from establishing startups in the state.

Labour unions were divided over the proposal, while billionaire donors contributed more than a quarter of a billion dollars towards campaigns opposing it. Advertisements funded by opponents portrayed the measure as a possible gateway to wider taxation and a threat to Californians' retirement savings.

The campaign unfolded amid growing concerns over affordability and rising fuel prices, which have contributed to public dissatisfaction with economic conditions across the United States.

Google co-founder Sergey Brin and at least 11 other billionaires collectively contributed $269 million to a political action committee called Building a Better California. The committee subsequently spent more than $300 million on campaigns opposing Proposition 40.

The defeat comes even as Democrats secured decisive majorities in both houses of Congress in the midterm elections, which were widely seen as a rebuke to Trump and his policies.

However, the party's broader push to increase taxes on the wealthiest Americans is expected to continue. Incoming Senate Finance Committee Chairman Ron Wyden has signalled that taxing the ultrawealthy will remain a central priority.

In a statement outlining the committee's priorities on November 4, Wyden said it would intensify efforts to ensure billionaires pay their fair share and hold tax evaders accountable.