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Beyond the ballot: California's billionaire wealth tax as a human rights issue

Photo: Shabeer Mohamed/Pexels

Michelle Fauber, School for Moral Ambition Tax Justice Fellow currently working with CESR, explores the significance of California's 'billionaire tax' which, despite having been narrowly defeated at the polls, represents a critical milestone in burgeoning demands for more effective taxation of the mega-rich.

California's Proposition 40 (or Prop 40), which put forward a one-time 5% tax on the wealth of the state's billionaires to counter federal funding cuts to state healthcare and education, appears to have been defeated. The proposal would have been the first tax in the US on total net worth (as opposed to solely income). It sparked a fierce political battle, drawing high-profile support from the likes of Senator Bernie Sanders and opposition from amongst some of California's wealthiest technology investors.

It would be easy to characterize this result as a major blow for the movement for tax fairness. However, we think that would be the wrong conclusion. Despite a vastly better-funded opposition (Google co-founder Sergey Brin alone poured at least $102 million into the effort to defeat it), nearly half of voters supported the measure. The campaign brought tax fairness into mainstream public debate and consciousness. It made clear to voters the relationship between taxes and essential public services like healthcare and education, and how those services are threatened when those with extreme wealth fail to pay their fair share. It also exposed the political and technical challenges that future efforts will need to overcome, in California and elsewhere. In aggregate, the Prop 40 example illustrates why fair taxation is not simply an economic policy choice, but a human rights imperative. 

Looking beyond the election results, this post looks at how putting human rights at the center of tax debates can help shape future reform efforts, and why international cooperation is critical to making fairer taxation possible.

With most of the votes counted, the measure ultimately appears to have failed, with votes split roughly 53% ‘no’ to 47% ‘yes’ as of November 12th.

Adding to the picture are the results of two competing ballot measures that opponents to the wealth tax had introduced to effectively undermine Prop 40 if it had passed: Proposition 41, which would have subjected new tax revenues to state spending limits and audit requirements, and Proposition 42, which sought to prohibit new taxes on personal wealth and restrict retroactive tax increases. While Prop 41 failed with around 55% voting against it, Prop 42 was on track to pass with 52% support. Meanwhile, Proposition 3, which makes an existing tax increase on high income earners permanent to help fund education, passed comfortably with around 61% of the votes.

These results don’t point to a neat story. On the same ballot, voters rejected a new tax on billionaire wealth while supporting the continuation of an existing tax on high incomes. That doesn’t prove that there’s broad support for wealth taxes, but it also doesn’t suggest that voters oppose asking wealthy Californians to contribute more.

Voting patterns offer some insights, but no simple explanations. County-level voting fell largely along partisan lines, but not entirely; a number of prominent Democrats and allied groups said they supported taxing wealth but objected to how this particular measure was designed, including who would benefit from the revenue. Notably, Governor Gavin Newsom argued that a national tax on billionaires would be more effective than a tax in one state. The vastly unequal fundraising landscape is also relevant: opponents raised over $370 million, much of it on gathering signatures to get the two rival measures on the ballot and advertising campaigns, compared to the roughly $32 million raised by supporters.

It is too early to say which factors ultimately drove Prop 40’s defeat. But understanding why voters rejected the measure is only one part of assessing its significance. The campaign brought questions into the public arena that will outlast this ballot measure, like: How should governments protect essential services in the face of funding cuts? How can we tax vast fortunes fairly? And, what happens to democratic decision-making when those with the biggest fortunes can spend so heavily to influence the rules governing their own taxation?

These questions go to the heart of how governments raise and use public resources, whose interests tax systems serve, and what governments owe the people whose rights depend on those resources. A human rights approach to fiscal policy offers a way to understand those obligations.

At first glance, California’s billionaire tax debate might seem far removed from human rights. But the questions at its center are closely connected to what governments need to do to make rights a reality.

Human rights are not only about free speech or fair trials. They also include the rights to health, education, and an adequate standard of living. They depend on public resources: hospitals that can provide care, schools that can serve their communities, and social protection systems that people can rely on. How governments raise those resources, who contributes, and whose needs are prioritized are therefore human rights questions as much as economic ones. 

This connection is grounded in international human rights law. More than 170 countries have ratified the International Covenant on Economic, Social and Cultural Rights, which requires them to use the “maximum of its available resources” to progressively realize these rights. The United States signed but did not ratify the Covenant, so it is not bound by its provisions in the same way. Still, the framework creates a standard for evaluating governments' choices about taxation and public spending.

Those responsibilities don't stop at how governments spend money. In a 2025 statement on tax policy, the UN Committee on Economic, Social and Cultural Rights emphasized that how governments raise revenue matters, too: whether tax systems reinforce or reduce inequality, whether those with the greatest resources contribute fairly, and whether people have a meaningful say in fiscal decisions. These principles are also reflected in the Principles for Human Rights in Fiscal Policy, developed by organizations across Latin America with CESR as secretariat.

Three aspects of this framework are particularly relevant to California:

  1. Governments must make adequate efforts to mobilize resources before cutting essential services. Prop 40 emerged in response to major federal funding cuts threatening healthcare access for millions of Californians. The campaign put a fundamental question before voters: when essential services face deep cuts, what options should governments consider to protect them? A human rights approach requires governments to examine whether they are making sufficient to raise and deploy available resources, including through progressive taxation, rather than treating cuts to essential services as inevitable.
  2. Fair tax systems should reflect people's differing abilities to contribute. The extraordinary concentration of wealth in California makes this question especially relevant. California's approximately 250 billionaires hold more than $2 trillion in wealth, yet pay annual state income taxes equivalent to around 0.2% of that wealth. Much of billionaire wealth consists of assets whose rising value is not necessarily captured by annual income taxes. This gap exposes a fundamental inequity in the current tax system: extraordinary concentrations of wealth can grow largely outside the reach of income taxation, allowing those with the greatest economic resources to contribute disproportionately little relative to their wealth. A human rights approach calls for confronting this imbalance through progressive tax policies that reflect people's capacity to contribute, so as to promote substantive equality. 

  3. Tax policy must be shaped through informed and meaningful public debate. The extraordinary sums spent opposing Prop 40 illustrate the challenge of democratic decision-making in a society marked by extreme wealth inequality. Wealthy individuals and businesses have a right to express their views and challenge policies they consider harmful. But when a small number of people can devote vast resources to influencing the rules governing their own taxation, questions about transparency, political influence and equal participation become difficult to avoid.

None of these principles confirm that Prop 40 was necessarily the right policy. Its one-time structure, potential effects on future state revenue, and allocation of funds all deserve scrutiny. In fact, a human rights approach demands that scrutiny: the goal is not simply to raise more revenue, but to build tax systems that can fund rights fairly, effectively, and sustainably.

California's experience will be relevant learning grounds for similar efforts both in the United States and elsewhere. The challenge for future campaigns will be to build on the momentum that made tax fairness salient for so many people while addressing the political and practical obstacles that prevented Prop 40 from passing. Some potential lessons follow: 

Opposition needs to be anticipated beyond the ballot question itself

The sheer amount of spending on ads from the opposition underscored the need for campaigns to have credible evidence to challenge misleading claims, anticipate legal and political obstacles, and ensure that well-funded interests do not dominate the debate. On the communications front, the narrative (and in some cases, threat) that billionaires would just leave the state proved effective, even though the number of billionaires in California actually rose in the months after the tax was proposed. A few well-publicized moves can outweigh the data, so campaigns need that evidence ready before the debate starts. 

Future campaigns also need to be able to grapple with changing technology and transparency standards. For example, while California’s disclosure rules let journalists trace most of the money spent by the opposition, there are newer frontiers of influence like paid social media influencers that are much harder to follow. California did actually recently approve new legislation to tighten disclosure requirements for social media influencers posting paid political content, but that bill does not take effect until 2027. Understanding what is and isn’t possible in terms of transparency about political spending and influence will only become more relevant as information consumption patterns evolve. 

The principle behind a measure matters, but cannot fully come at the expense of policy design

Prop 40 connected a proposed tax on extreme wealth to an urgent public need: protecting healthcare services from deep funding cuts. That gave voters a concrete reason to consider the measure. But the proposal also raised questions about how the tax would work, whether its one-time structure could provide a sustainable response to ongoing funding needs, and how its revenue should be allocated. Some potential allies supported progressive taxation but disagreed with the measure's design or priorities. Future campaigns must demonstrate not only why the wealthiest should contribute more, but why a particular proposal is fair, workable and capable of delivering its intended benefits. Centering people's rights means paying attention to policy details, rather than treating them as secondary to the broader principle.

Strong grassroots mobilization and public messaging are vital, but still need political allies

Prop 40 attracted significant grassroots support and prominent national advocates, yet it faced opposition from California's governor and several organizations that might otherwise have been natural allies. Those divisions made it harder to present voters with a clear, unified case for reform.

Building broader coalitions means engaging potential allies early, addressing disagreements over how revenue should be used, and ensuring that the people and communities who stand to benefit from stronger public services have a meaningful role in shaping the proposal. A human rights approach can offer common ground by connecting tax policy to shared priorities, but it cannot substitute for the political work of building agreement.

Finally, campaigns can lose but still set up future wins

Massachusetts offers one example of many. After the state's highest court removed a proposed tax on incomes above $1 million from the 2018 ballot, supporters regrouped and won approval for a revised measure in 2022, which has since raised more revenue than expected. The movement for a higher minimum wage followed a similar trajectory, with local and state campaigns building momentum for reforms elsewhere. Although a $15 federal minimum wage has still not become federal law, the movement helped bring the issue into the mainstream progressive national political agenda and has arguably pressured major employers to raise wages. Neither outcome was inevitable, but both illustrate how early setbacks can help movements refine their arguments, strengthen coalitions and build the public support needed for future victories.

California's next steps are unclear, but CESR is interested in whether the public engagement generated by Prop 40 can be translated into well-designed proposals, broader coalitions and a more durable movement for fair taxation.

One of the most prominent arguments against Prop 40 was that billionaires could simply leave California to avoid paying the tax, taking other tax revenue with them. While this claim is frequently found to be overblown when scrutinized, especially at the national level, when it comes to moving across more porous domestic state lines, the risk is more legitimate. 

A potential countermeasure to the so-called billionaires’ exodus has been put forward by the economist Gabriel Zucman, who proposes strengthening exit taxes and applying trailing tax liabilities to prevent billionaires from relocating to tax havens to dodge his proposed 2% minimum global wealth tax. By taxing unrealized capital gains upon departure and continuing to collect taxes on former residents for a set period — backed by automatic exchange of bank information — countries can unilaterally enforce wealth taxes even without universal global adoption. CESR welcomed Zucman’s blueprint when it was presented to the G20 in 2024, noting its significance not only for revenue but for gender, racial and climate justice. As we argued then, a coordinated minimum tax on the super-rich is a matter of justice, redistribution and the resources governments need to fulfil human rights.

Beyond individual wealth, international tax rules help determine where wealth and corporate profits are taxed, which governments collect the revenue, and how effectively countries can prevent tax avoidance. When those rules allow substantial resources to escape taxation, governments have less money available for healthcare, education, social protection and other services essential to realizing human rights. These consequences can be particularly significant for lower-income countries, which often have less influence over the international rules shaping their tax revenues. International tax cooperation is therefore not simply about making taxation more effective, but about distributing taxing rights more fairly and enabling governments to mobilize the resources needed to fulfill their human rights obligations.

The ongoing negotiations for a United Nations Framework Convention on International Tax Cooperation offer an opportunity to address these challenges. Governments will meet in Nairobi from November 30th-December 10th, 2026 to advance negotiations, including on the effective taxation of high-net-worth individuals. In our previous submission on the Zero Draft, CESR called for the Convention’s article on high-net-worth individuals to require states to adopt, not merely explore, coordinated approaches and to ground effective taxation of the very wealthy in the principle of ability to pay. For CESR, the priority is to secure meaningful commitments that make international tax rules fairer, help prevent tax avoidance and strengthen countries' ability to finance human rights.

Campaigns like Prop 40 can build public understanding and political momentum for fairer taxation, while international cooperation can make reforms more feasible by addressing obstacles that individual governments cannot overcome alone. Ultimately, governments' ability to finance people's rights should not depend on competing to offer the most favorable tax treatment to those with the greatest wealth.

What comes next

Prop 40’s defeat raises important questions about how to design and build support for effective wealth taxes, but it should not be mistaken for a rejection of broader tax justice efforts. The campaign brought questions about tax fairness, public services and the influence of extreme wealth into a debate that reached far beyond expert policy circles. It made the connection between taxation and people's rights more tangible, while exposing the challenges future reforms will need to overcome. The lessons from Prop 40 can inform ongoing efforts to tax extreme wealth in other US states as well as abroad, such as Hungary's recently proposed wealth tax.

Few voters have heard the phrase “maximum available resources” or thought about what a proportionate contribution means, but millions have watched the state grapple with what those ideas really mean in practice. The task now is to build on that momentum, and we argue that the opportunity is to do so by putting people's rights at the center of the argument. Rather than primarily arguing about taxes in terms of rates, revenue, and economic effects, advocates can make clearer what's at stake for people's access to healthcare, education, food, and the other essentials of a dignified life. That is the foundation for reforms that can succeed, on the ballot and beyond.