California rejects proposal to tax multimillion-dollar wealth

Oelectors from California, in the southwest of the United States, rejected a proposal, unprecedented in the country, to tax the net worth of multimillionaires, after a close dispute that involved huge spending by technological leaders.

The rejection represents a victory for the Democratic leaders who opposed to the measure, including Governor Gavin Newsom, who may run for President of the United States in 2028. Tax critics, known as Proposition 40, argued that the measure would lead the ultra-rrich taxpayers to abandon the state.

The majority of Californians vote by post, and any voting card with a postmark dated until election day, provided it arrives within a week, is counted.

As a result, it often takes days or even weeks for the result of close disputes to be defined.

The Associated Press (AP) news agency determined on Monday that the “no” had obtained enough votes to win.

The “no” campaign raised about 10 times more financial resources than the “yes” side. Only the co-founder of technological giant Google, Sergey Brin, attributed more than 100 million dollars (89 million euros) to a political action committee against the measure.

The proposal provided for a single 5% tax on the wealth of Californians whose net worth exceeds one billion dollars (891 million euros).

Most resources would be used to compensate for cuts in federal health funding, while 10% would be directed to education and food assistance programs.

The SEIU United Healthcare Workers West syndicate, which supported the measure, stated that it was necessary to restore about 100 billion dollars that the state will lose in federal health funds over the next five years.

Proposal 40 has represented the biggest test to date of an idea defended some time ago by progressives: to increase taxation on ultra-riffs, focusing on the main source of their incomes, investments rather than wages they receive for work.

The measure was supported by progressive leaders from outside the state, including Vermont Senator Bernie Sanders, who participated in acts in several California cities in the final weeks of the campaign, encouraging voters to approve it.

The AP election poll indicates that most of California’s young voters, under 30, voted “yes.” Older voters were much less favorable: about seven out of 10 voters aged 65 or over said they voted “no”.

Gavin Newsom claims that a California estate tax would put the state at a disadvantage, but supports a national minimum tax for anyone with a net worth of more than $100 million.