California voters rejected Proposition 40, which imposed a one-time tax on billionaires, while Proposition 42, which bars new taxes on personal property and most retroactive taxes, held a 51.6% lead with about 83% of ballots counted. Building a Better California, the committee largely funded by Sergey Brin’s $102 million contribution, spent more than $300 million to defeat Proposition 40 and pass Propositions 41 and 42. Despite billionaire warnings that they would leave the state, the tax’s defeat limited the government’s ability to tax investments, financial assets and previously untaxed wealth. Proposition 42 could also jeopardize the capital-gains tax on the top 2% of earners and narrow revenue options as the federal H.R. 1 law is expected to cut about $30 billion a year from Medi-Cal.
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