California voters are on track to reject a first-of-its-kind tax on billionaires, marking the end to one of the most expensive and divisive political battles in state history.

Proposition 40 would impose a one-time 5% tax on the wealth of billionaires who were California residents at the start of 2026, with most of the proceeds earmarked to shore up healthcare. The ballot measure has consistently trailed below the majority it needed to pass: With 60% of the estimated vote counted, only 45% of Californians support it, according to the Associated Press.

A defeat would deal a major setback for efforts to tax extreme wealth across the nation, as supporters had hoped California would provide a blueprint for similar campaigns elsewhere in the US. But the measure struggled under opposition from a coalition that included tech billionaires, Governor Gavin Newsom and groups such as the Planned Parenthood Affiliates of California.

Opponents raised more than $300 million, led by Building a Better California, a political influence operation bankrolled by Google-cofounder Sergey Brin and other billionaires.

“We dodged a bullet on this asset seizure tax,” said Garry Tan, chief executive officer of the influential startup accelerator Y Combinator, on a post on X. “Huge thanks to Sergey Brin here.”Even if Proposition 40 stages a comeback and clear the 50% threshold it needed to pass, there’s another hurdle: Proposition 42. One of two rival ballot measures, designed to block the wealth tax, it has so far won 54% support. For the wealth tax to take effect, Proposition 40 would also need to finish with more “yes” votes than Proposition 42.

California’s count can stretch on for days as the state relies heavily on mail-in ballots, which can arrive up to a week late as long as they’re mailed on or before election day. Proponents of the tax are already talking about another try.

“This is the right thing to do, and if necessary we will be back in 2028,” said Dave Regan, the president of the union behind the tax, in a press conference Tuesday night, as polls closed.

A healthcare-workers union first proposed the tax more than a year ago as a way to offset billions of dollars in federal cuts that could force hospitals to close and leave millions of Californians uninsured. It won the support of progressive politicians including Vermont Senator Bernie Sanders and US Representative Ro Khanna, whose district includes Silicon Valley.

“There has to be a tax on billionaires,” Khanna said, also at the press conference. “We will see this happen, we will succeed, and we will outrun the money.”While Californians balked at the billionaire tax, Tuesday’s Democratic wave helped elect politicians who campaigned on reining in the political influence of the ultrawealthy and making them pay more in taxes. In Texas, Democratic Senator-elect James Talarico promised to close tax loopholes that benefit the richest Americans.

“There’s a certain number of voters who were going to vote for the billionaires tax no matter what,” said Dan Schnur, a professor at the University of California at Berkeley, who expects the tax to be defeated. “But this particular initiative was too much for some voters.”