Billionaires Spend $300 Million to Defeat California's 5% Asset Tax

Californians voting on November 3 will decide whether to impose a one-time 5 percent tax on the assets of the state's billionaires. The vote is accompanied by the most expensive ballot measure campaign in state history, driven largely by opposition spending that has reached more than $300 million. Supporters of the measure, known as Proposition 40, have raised only $32 million, creating a disparity that David McCuan, a political science professor at Sonoma State University, notes has made this one of the most costly campaigns of the midterm election.

The proposal was co-written by Brian Galle, an economics professor at the University of California, Berkeley. Galle recently received a flyer in his mailbox claiming the tax could apply to anyone, including their retirement savings. He stated that these details were not part of the original text. Ashley Craig, a volunteer for the group Patriotic Millionaires, which supports the tax, reports that voters frequently encounter similar misinformation during door-to-door outreach. Craig describes the campaign environment as feeling like an alternate reality where many residents believe the tax will soon include them.

Major tech figures have led the financial push against the measure. Donors include Google co-founder Sergey Brin, DoorDash founder Tony Xu, Stripe co-founder Patrick Collison, Ripple co-executive chairman Chris Larsen, and venture capitalists John Doerr, Michael Moritz, and Vinod Khosla. Meta founder Mark Zuckerberg did not donate to the opposition but informed the company's board, which includes Xu and Collison, that he intends to purchase a home outside California to avoid the tax. Meta subsequently created a new class of shares that Zuckerberg could use to pay the tax if the measure passes.

Governor Gavin Newsom, a Democrat who is considering a presidential run in 2028, opposes the tax. He described the proposal as poorly written and argued it could harm the state if billionaires with an estimated combined wealth of $2.3 trillion relocate. Newsom is not alone in his stance; Xavier Becerra, the Democratic candidate for governor, and former congresswoman Katie Porter have also voiced opposition. McCuan attributes this resistance to a rift within the Democratic Party between progressives, who support the levy, and moderates, who view it as a high-stakes test for the 2028 cycle.

Opponents are also backing two other ballot measures that could negate Proposition 40 if they pass and receive more votes. One measure would prohibit new state taxes based on personal property or those imposed retroactively. The second would require state auditors to review the financial impact of proposed taxes before voters cast ballots. A recent poll by the Public Policy Institute of California found that voters support the billionaire tax by a small margin, while also supporting the two opposing measures. Mark Baldassare, the institute's survey director, noted that only about a third of citizen initiatives pass and that support can decline if voters remain uncertain.

Suzane Jiminez, chief of staff for the Service Employees International Union health workers, which sponsored the measure, expressed confidence that supporters will secure the necessary votes. She said that 3,000 volunteers have been knocking on doors and distributing flyers in recent weeks. Senator Bernie Sanders and Representative Ro Khanna have also campaigned across the state to rally support. Baldassare plans to conduct another poll as voters review official state guides, while McCuan suggested that the historic spending against the measure may serve as a political victory for progressives regardless of the final outcome.