One Million Vote Gap Seals Fate of California Billionaire Tax

With roughly half the votes counted in the early hours of Wednesday, the 'no' side held a lead of nearly 13 points, amounting to approximately one million votes. This margin makes the passage of California's proposed billionaire tax, known as Prop. 40, unlikely. The result signals a major loss for low-income residents and entertainment workers who relied on the measure to secure healthcare coverage.

The initiative sought to impose a one-time 5% tax on the state's approximately 200 billionaires. The projected revenue would have strengthened California's healthcare fund to offset federal cuts, specifically targeting support for Medi-Cal and other programs for low-income residents. The fight attracted more than $350 million in spending, making it one of the most expensive in state history. Opponents and allied campaigns accounted for over 96% of that total.

The measure would have served as a backstop for freelancers and lower-paid behind-the-camera workers, including grips, editors, and production assistants. Many of these workers piece together seasonal employment and face rising difficulty in maintaining insurance. Actors also struggle to qualify for coverage as scripted television orders decline and productions move overseas. SAG-AFTRA performers frequently miss quarterly deadlines tied to a $28,000 earnings minimum.

Cheyenne Jackson, an actor known for roles in American Horror Story, 30 Rock, and Glee, noted the current difficulty in the industry. Last month, he launched One Job Away, a project for actors needing a few more gigs to reach annual minimums for health insurance. He reported receiving hundreds of inquiries from union members at risk of losing coverage. Data from the UC Berkeley Labor Center indicates that roughly 22% of workers in the arts and entertainment sector were enrolled in Medi-Cal in 2023. The Motion Picture Television Fund helped more than 1,100 low-income or uninsured workers obtain coverage in 2024.

Hollywood largely remained quiet during the campaign. Ashley Craig, a volunteer for Patriotic Millionaires, stated, 'Everybody was silent on this.' Jackson described the industry's silence as 'the billion-dollar question,' adding that 'Some conversations need to happen.' Gov. Gavin Newsom emerged as a prominent opponent, arguing the tax would drive wealthy residents and businesses away. Meta founder Mark Zuckerberg threatened to leave the state if the measure passed. Steven Spielberg moved to New York earlier this year, a move fueled by speculation about the tax since it counted intellectual property rights in asset valuations.

Other industry figures who could have faced the levy include George Lucas, David Geffen, and Oprah Winfrey. Newsom's opposition to Prop. 40 coincided with his endorsement of Prop. 42, a billionaire-backed measure also headed for victory. Prop. 42 would effectively prohibit many future wealth taxes. The governor also acted as an unofficial mediator in the lawsuit blocking Paramount's $110 billion bid for Warner Bros. Discovery, citing the state's reputation and taking CEO David Ellison's threat to move out of California seriously.

The defeat of Prop. 40 leaves the existing gaps in healthcare coverage for the entertainment workforce. The political alignment of Newsom with wealthy opponents suggests a continued influence of capital on state policy. The final certification of results is scheduled for later this week, confirming the numerical lead observed in the initial count.