Statewide, the “no” side for Proposition 40 is getting 55% of the vote versus 45% voting “yes.” That split exactly matches how it played out in Santa Clara County, home to tech strongholds like Sunnyvale, Palo Alto, Cupertino, and Mountain View.

The wealthy Bay Area enclave of Marin County, which sits just north of San Francisco, also came out against Prop 40 as did San Mateo County, which is just south of the city.

By contrast, 55% of San Francisco County voters were in favor of Prop 40 and 45% were against. That’s despite being home to top AI startups OpenAI and Anthropic, which are planning to go public soon and will create new millionaires—and billionaires.

Of course, plenty of employees and early investors in the AI giants live outside San Francisco and likely voted according to their pocketbooks as Prop 40 sought a one-time 5% tax on billionaires.

Opponents of the ballot measure warned it was unlikely to remain a one-time levy, and the way it would’ve taxed privately held assets raised fears founders might have to sell controlling stakes in their companies.

That concern may have resonated especially across the startups and venture capital firms in Silicon Valley who are not quite billionaires yet but have aspirations to become one.

Fearing the possibility of a wealth tax, several billionaires have already fled California, including Google cofounder Sergey Brin, who helped finance the campaign to defeat Prop 40.

And because the state already relies heavily on the wealthy for its budget, it doesn’t take much to move the needle, which perhaps weighed on voters’ minds as well.

The loss of just six billionaires drastically reduced estimates of how much the wealth tax would’ve raised in revenue while also cutting forecasts for how much revenue California could generate from income taxes in the future.

Meanwhile, the election results revealed another split within the state. Los Angeles County voters were in favor of Prop 40, 53% versus 47%.

Unlike Northern California, which is a tech hub that’s leading the AI charge, Southern California is an entertainment hub that’s threatened by AI-generated content.

Alongside the campaign against Prop 40, opponents also pushed competing ballot measures designed to nullify the proposed billionaire wealth tax.

One of them is leading in the vote tally. Prop 42 would prohibit taxes on personal savings, assets and retirement holdings.

It dovetailed with a key anti-Prop 40 message, namely that the billionaire tax could someday be expanded to includes everyone else’s wealth, too.

But Prop 40’s defeat and Prop 42’s ban on future wealth taxes doesn’t mean the issue is going away forever. In fact, even some of the opponents of the billionaire tax were against it because it was restricted to one state and not a nationwide levy that would be harder to dodge.

“A ‘no’ vote doesn’t mean similar measures won’t ever be implemented,” Michael Feispor, partner on EY’s private tax team, said in a statement. “Taxpayers who have been watching from the sidelines should use this window to revisit their residency, domicile, and estate planning structures—because now they have some more time to plan.” 

He added that wealthy Californians are already asking hard questions about residency, with some acting on them. 

For those who remain in the state, methods for organizing wealth that avoid steep estate taxes, such as irrevocable trusts, are becoming more important.

“The question isn’t whether this kind of tax or something similar comes back—it’s whether taxpayers are prepared when it does,” Feispor said. “Whatever the outcome, this tax debate isn’t over and has elevated the importance of long-term planning for individuals and families.”