California just voted down Proposition 40, which would have added a one-time 5% tax on billionaires' net worth (excluding homes and retirement savings).
The idea was to tackle wealth inequality, but it didn't win enough support, even in this usually progressive state.
The result shows how tough it is to get wealth taxes passed, even when the goal sounds fair.
Debate centers on billionaires' wealth tax
The vote has kicked off a heated debate.
Gabriel Zucman from UC Berkeley argued the tax could help close the wealth gap and boost public funds.
On the flip side, Stanford's Joshua Rauh warned it might drive billionaires (and their money) out of California, hurting tech jobs and state revenue.
This decision is likely to shape how people talk about taxing the ultra-rich in future elections and policies.