California Billionaire Tax Fails as Hollywood Workers Lose Safety Net

California’s proposed one-time tax on billionaires is likely to fail, removing a potential financial safety net for the state’s entertainment workforce. With approximately half of the ballots counted in the early morning hours of Wednesday, the no side held a lead of nearly 13 percentage points. This margin equates to roughly one million votes, making passage of the measure highly unlikely.

The initiative, known as Proposition 40, would have levied a five percent tax on the state’s estimated 200 individuals with net worths exceeding $1 billion. The revenue was designated to reinforce California’s healthcare fund. This funding aimed to offset federal cuts affecting Medi-Cal and other programs serving low-income residents.

For entertainment professionals, the tax offered a backup insurance option. Many grips, set decorators, costume designers, editors, and production assistants rely on seasonal work. Actors have also struggled to maintain coverage as scripted television orders have declined. Performers in the SAG-AFTRA plan face difficulty meeting the quarterly requirement of earning $28,000 to retain health insurance benefits.

Cheyenne Jackson, an actor known for roles in American Horror Story, 30 Rock, and Glee, described the current market as difficult. He launched One Job Away last month to identify actors who need only a few more roles to reach the SAG-AFTRA annual minimum for coverage. Jackson reported receiving hundreds of inquiries from union members at risk of losing their health plans.

Data from the UC Berkeley Labor Center indicates that 22 percent of workers in the arts, entertainment, recreation, and accommodation industry enrolled in Medi-Cal in 2023. The Motion Picture Television Fund assisted more than 1,100 low-income or uninsured industry workers in securing health coverage in 2024 through Medi-Cal and Covered California plans.

Opponents of the tax, including Sergey Brin and Peter Thiel, spent heavily to defeat it. The campaign attracted more than $350 million in total spending, with opponents and allied campaigns accounting for over 96 percent of that amount. Governor Gavin Newsom emerged as a prominent opponent, arguing the tax could drive wealthy residents and businesses out of the state. Meta founder Mark Zuckerberg threatened to leave California if the measure passed.

Newsom’s opposition to Proposition 40 coincided with his endorsement of Proposition 42, a billionaire-backed measure also headed for victory. Proposition 42 would effectively prohibit many future wealth taxes. Ashley Craig, a volunteer for Patriotic Millionaires, noted that the governor’s stance set the tone for the industry’s political alignment.