(Bloomberg) — A California measure that would levy an additional tax on millionaires to raise money for electric vehicles and wildfire prevention appeared headed for defeat, initial election results Tuesday night showed.
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Proposition 30 was failing 57% to 43%, according to the Associated Press, with about 32% of the votes counted. The measure, backed by rideshare company Lyft Inc., would implement a 1.75% tax on income above $2 million to fund helping Californians fund electric vehicles, build charging stations and hire firefighters for wildfires.
The new tax would raise $3.5 billion to $5 billion annually, and be subject to volatility given that the high-income residents’ fortunes fluctuate with the stock market and economy, according to the nonpartisan Legislative Analyst’s Office. About 35,000 California taxpayers would face the higher rate, according to an argument for the measure.
The proposition proved divisive among California’s business leaders and split Democrats in the heavily liberal state, with Governor Gavin Newsom speaking out against the measure and spending his own re-election campaign funds on ads urging voters to oppose it. He called Proposition 30 a corporate carve-out benefiting Lyft, which is facing a state mandate that 90% of rideshare vehicles be electric by 2030.
Read more: Wealthy Californians Face a Tax-the-Rich Onslaught at Ballot Box
Uncertainty about the outcome was reflected in the USC Schwarzenegger Institute-USC Price poll released last week, which showed voters were divided about evenly on the measure and within the margin of error.
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