Tech Founders Spend Over $300M to Block California Billionaire Tax

Voters in California will cast ballots on November 3 to determine if the state will collect a one-time 5 percent tax on the assets of its billionaire residents. The campaign to defeat the measure, known as Prop 40, has become the most expensive ballot fight in state history, according to David McCuan, a political science professor at Sonoma State University.

Opponents have donated more than $300 million to block the tax. These 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. In contrast, supporters have raised only $32 million.

Meta founder Mark Zuckerberg did not donate directly to the opposition. However, Meta's SEC filings reveal that he told the company's board he would purchase a home outside California to avoid the levy. The board includes Xu and Collison. They subsequently created a new class of shares for Zuckerberg to use for the payment, a move intended to mitigate potential effects on Meta's stock price.

The volume of advertising and mailers has confused some voters. Brian Galle, an economics professor at the University of California at Berkeley who helped draft the proposal, noted that a flyer he received claimed the tax could apply to retirement savings. He stated those claims were not in the original text. Ashley Craig, a volunteer with the pro-tax group Patriotic Millionaires, said she frequently hears from voters who believe the measure contains secret provisions. Any modification to the tax would require a two-thirds majority in the state assembly.

Galle argued that the spending illustrates the issue the tax aims to address. He said, "The irony is that Prop 40 is meant to make democracy more equal, but the billionaires are using their money to avoid that." Francesco Trebbi, a professor at Berkeley's Haas School of Business, described the contest as "Sergey Brin v millions of Californians."

The race highlights a division within the Democratic party. The state party has endorsed the tax, but Craig reported receiving limited ground support from it. Governor Gavin Newsom, who is considering a 2028 presidential run, opposes the measure. He called it "poorly written" and warned it could harm the state if billionaires, whose combined wealth is estimated at 2.3 trillion dollars, leave. Gubernatorial candidate Xavier Becerra and former congresswoman Katie Porter also oppose the tax.

Opponents have also backed two other ballot measures. One bars new state taxes on personal property or retroactive taxes. The other requires state auditors to review proposed tax measures for financial impact before a vote. If either measure receives more votes than the billionaire tax, it could negate the levy even if voters approve Prop 40. A recent Public Policy Institute of California poll found voters narrowly support the tax but also back the two blocking measures. Mark Baldassare, the institute's statewide survey director, noted that only about a third of citizen initiatives pass. Suzane Jiminez, chief of staff at the SEIU health workers union, said 3,000 volunteers have recently knocked on doors and that Senator Bernie Sanders and Congressman Ro Khanna have rallied support.